Virtual worlds promise to be an excellent venue for research and education in business and related disciplines. This document provides an introduction to virtual worlds, discusses why virtual worlds are so well-suited to the study of real-world business, and describes how a platform could weave...

I define moral accounting as the crafting of accountability systems that improve moral performance in a moral way. I also propose that accountants are well-positioned to offer Moral Accounting Engagements (MAEs), which evaluate how a client’s systems fall short of moral accounting’s...

Advisors frequently have an interest in the decisions their advisees make, forcing advisees to distinguish their advisor’s unbiased beliefs from their self-interested bias. This task is likely to be especially hard when psychological forces distort advisors’ beliefs to make some of their...

Experiments are an underused method in finance and have natural advantages for behavioral finance. Experiments can provide a useful means to circumvent several common econometric issues such as omitted variables, unobserved variables, and self-selection. Experiments can extend the theoretical...

We provide experimental evidence that relaxing margin restrictions to allow more short selling can exacerbate overpricing, even though it reduces equilibrium price levels. This is because smart-money traders initially profit more by front-running optimistic investor sentiment than by...

Prior research provides only weak and controversial evidence that people overestimate the likelihood of desirable events (wishful thinking), but strong evidence that people bet more heavily on those events (wishful betting). Two experiments show that wishful betting contaminates beliefs in...

Most tests of asset pricing models rely on realized returns as a proxy for expected returns, and cannot determine whether security characteristics are associated with returns because they affect risk or because they reflect mispricing. This paper avoids these problems by conducting two...

Those who believe markets are inefficient rarely provide a coherent and refutable alternative to the Efficiency Markets Hypothesis (EMH). This paper presents the Incomplete Revelation Hypothesis (IRH) as such an alternative, and describes its implications for financial reporting research,...