We demonstrate the need to view in a dynamic context any decision based on limited information. We focus on the use of product costs in selecting the product portfolio. We show how ex post data regarding the actual costs from implementing the decision leads to updating of product cost estimates...

Beginning with Anderson, Banker, and Janakiraman (2003), a rapidly growing literature attributes the short-run asymmetric cost response to activity changes (i.e., sticky costs) as resulting from short-run managerial choices. In this paper, we are agnostic on the theory of sticky costs. Rather,...

The use of simulation methods is not very common in accounting research, even though several authors have pointed to the advantages these methods offer in addressing accounting research questions. In this position paper, I discuss the difficulties encountered when applying simulation methods in...

We explore the theoretical relation between earnings and market returns as well as the properties of earnings frequency distributions under the assumption that managers use unbiased accounting information to sequentially decide on real options their firms have and report generated earnings...