Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors...

Recent studies investigate the impact of air pollution on labor productivity. We extend this literature by showing that air pollution negatively affects equity analysts in their role as information producers for capital markets. Compared to analysts experiencing clean air, analysts exposed to...

We report the results of an experiment where management discloses in the audited financial statements an opportunistic firm-specific capital structure. This disclosure, required under current IAS 1 rules, is subjective and susceptible to management bias. In our study, if used by nonprofessional...

Prior studies use fundamental earnings forecasts to proxy for the market's expectations of earnings because analyst forecasts are biased and are available for only a subset of firms. We find that as a proxy for market expectations, fundamental forecasts contain systematic measurement errors...

Recent studies document that market participants react positively to the positive language sentiment or tone embedded in financial disclosures, and that investors' reactions to negative news are more muted with poor disclosure readability. However, while language sentiment and readability...

This paper contributes to the understanding of the German two-tiered enforcement set-up. The first tier is represented by the private review panel FREP, which has been investigating IFRS financial statements since 2005 and ensures consistent and faithful application of the latter. The German...

This research aims to examine empirically the overreliance on representativeness heuristic and anchoring-adjustment influences experienced by investors in forecasting future earnings. This research was a laboratory experiment with a design of 2x2 full factorial between subject. The results...

We report the results of an experiment where management discloses in the audited financial statements a firm-specific capital structure that is susceptible to manipulation (i.e., subjective). This disclosure is allowed under current IAS 1 rules. In our study, if used by nonprofessional investor...

Bayesian learning provides a core concept of information processing in financial markets. Typically it is assumed that market participants perfectly know the quality of released news. However, in practice, news' precision is rarely disclosed. Therefore, we extend standard Bayesian learning...

Bayesian learning provides the core concept of processing noisy information. In standard Bayesian frameworks, assessing the price impact of information requires perfect knowledge of news’ precision. In practice, however, precision is rarely dis- closed. Therefore, we extend standard Bayesian...