This paper uses recent experimental studies of financial accounting to illustrate our view of how such experiments can be conducted successfully. Rather than provide an exhaustive review of the literature, we focus on how particular examples illustrate successful use of experiments to determine...

This study describes a quot;cheap-talkquot; model in which sellers can credibly convey unverifiable information by choosing whether or not to exaggerate verifiable information. We find that unexaggerated claims can communicate favorable unverifiable information if buyers are not too likely to...

Numerous archival papers indicate that investors can generate profit by following disciplined trading strategies that exploit the market's incomplete adjustment for various accounting data. Even assuming efficient markets in which securities are not mispriced, evidence suggests that both...

This paper shows that whether laboratory markets over- or under-react to information is influenced by two factors: the reliability of investors' information and the portfolio formation rule used to identify price anomalies. Consistent with research in psychology, prices tend to over-react to...

Virtual worlds can allow experimental researchers to create and examine settings with far more institutional complexity than is possible in a traditional laboratory setting. This document discusses how studies with greater complexity can complement more traditional experimental methods for those...

Advances in virtual world technology pose risks for the safety and welfare of children. Those advances also alter the interpretations of key terms in applicable laws. For example, in the Miller test for obscenity, virtual worlds constitute places, rather than quot;works,quot; and may even...