We model the dynamic survival of earnings fixated investors in a competitive securities market that allows for learning and arbitrage and that is populated by heterogeneous investors. Our model is distinct from those based on aggressive trading by overconfident investors. We prove that in the...

Address the questions: Why earnings are so important that firms feel compelled to manipulate them? What is earnings management? What set of circumstances will induce earnings management? And how will the interaction among management, boards of directors, investors, employees, suppliers,...