In a previous paper we establish the equality between accounting numbers and information in a classical Arrow-Debreu economy. One of the conditions is complete market, that is, there exists an Arrow-Debreu security for every possible state realization. In this paper, we relax this condition and...

We report on a panel discussion at the 2001 CMU Accounting Mini-conference under the title "Intellectual Foundations of Accounting." We provide a background and the motivation for the discussion and present the remarks by the four panelists. A number of perspectives are taken. Sunder emphasizes...

We report on a panel discussion at the 2001 CMU Accounting Mini-conference under the title "Intellectual Foundations of Accounting." We provide a background and the motivation for the discussion and present the remarks by the four panelists. A number of perspectives are taken. Sunder emphasizes...

This teaching note illustrates how reporting historical data, even when it is unverifiable, can be useful in improving productive efficiency. Historical cost accounting is evaluated in a simple multi-person setting with private information. Because the source of contracting frictions is limited...

A simple two-period model with information asymmetry and restriction on transfers is used to induce an inter temporal relationship between a sequence of investment decisions. The owner's reputation for honoring commitments to ex post inefficient production decisions allows her to make efficient...