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...

We consider how a principal can use randomized strategies in designing optimal contracts in agency settings. We distinguish between ex post randomization (over fee schedules following act selection by the agent) and ex ante randomization (over fee schedules before act selection). We show that ex...

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...