We examine how biased financial reports (managed earnings) affect how firms compete in the product market and how product market competition affects incentives to bias reported earnings. We find that Cournot competitors bias their financial reports so as to create the impression that their costs...

We examine the impact of Regulation Fair Disclosure on the competitive advantage of All-Star analysts as measured by turnover in the rankings. Institutional Investor All-Americans, chosen by votes of institutional investors based on overall helpfulness, experienced a significant increase in...

In this paper, we ask whether investors' responses to nines in the rightmost digits of stock prices are similar to consumers' responses to nines in the rightmost digits of retail prices. In contrast to the increase in demand that is often observed for 9-ending retail prices, excessive overnight...

Using a Verrecchia [1983]-type model, we study the optimal voluntary disclosure strategy of a manager with private information that helps the market interpret financial information the firm is required to report. In equilibrium, the manager's disclosure strategy enhances upward or mitigates...

We reexamine the descriptive ability of the conventional wisdom that earnings announcements made after trading and on Friday are dominated by bad news in light of the 24/7 media coverage and other technological changes of the 1990s. We find that the change in media coverage has facilitated a...

Abstract, Part I: This paper uses periods of unusually heavy earnings estimate revision activity by analysts to assess the relative usefulness of corporate information events (CIEs) in firm valuation. Because accounting information is more readily available, newsworthy and accessible, we...

Managers have sufficient discretion under Generally Accepted Accounting Principles (GAAP) to adopt more or less conservative financial reporting policies. In this paper, we develop a signaling model to provide insight into managers' decisions to be conservative in their accounting. We provide...

A standard result in the voluntary disclosure literature is that when the manager's private information is a signal correlated with the firm's liquidation value, mandatory disclosures substitute for voluntary disclosures. In this paper, we assume that the manager's private information...

In Part I of this study, we evaluated the relative usefulness of information in alternative corporate information events (CIEs) to analysts by examining the frequency with which they trigger clusters of analysts' earnings estimate revisions. In Part II, we examine investor response to various...

This paper uses periods of unusually heavy earnings estimate revision activity by analysts to assess the relative usefulness of corporate information events (CIEs) in firm valuation. Because accounting information is more readily available, newsworthy and accessible, we hypothesize that CIEs...