A pervasive theme in both accounting and statistics is aggregation. However, in contrast to statistics, a customary standard for determining the best aggregation rule in accounting is unavailable or, at least, not explicitly defined. Also, most accounting procedures follow a well-specified...

Intertemporal aggregation results in a summarization of information and a natural delay in the release of information. We study a principal-agent model and show that intertemporal aggregation can be an optimal feature of a performance evaluation system. We then highlight subtleties associated...

This article provides an incentive-based explanation for the practice of job rotation. When agents privately learn about the productivity of tasks on which they work, job rotation can be an efficient means of eliciting their information. Each agent freely communicates his information since the...

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...

This paper provides an explanation for why incentive contracts that are muted (compared to incentive contracts derived from standard agency models) may be effective in motivating team members. By having the team repeat a task in a second period, the explicit incentives that need to be provided...

In this paper we examine a simple but suggestive setting in which the income number arises naturally (and directly) from competitive markets. While no explicit assumptions are made about individual firm's objectives, it turns out that equilibrium is consistent with the maximization of a number...