Although prior research presents employees' subjective valuations of their stock options as being either below or above firms' opportunity cost of issuing options, we examine subjective valuations in terms of their distribution around cost. We argue that variation of subjective valuations within...

A perplexing yet persistent empirical finding is that individuals assess probabilities in words and in numbers nearly equivalently, and theorists have called for future research to search for factors that cause differences. This study uses an accounting context in which individuals are commonly...

In the Dueling Experts Game, adversarial experts strategically produce quot;goodquot; or quot;badquot; evidence to support their partisan testimony. Good evidence is probative while bad evidence has no evidential value. The new feature of this Game is that Judge sometimes erroneously identifies...

The production, dissemination and market consequences of firm-specific information are shaped by the incentives of market players operating within the constraints imposed by securities regulation. In this paper we focus on constraints to short selling activity and address two questions: Do short...

We examine the influence of common ownership on commonalities in the information environment. Specifically, we study commonalities in financial statements and in the actions of key agents such as financial analysts and firm managers who contribute and respond to the information environment....

The majority of U.S. public companies release annual earnings prior to the completion of audit fieldwork. We investigate this phenomenon in a controlled experiment with audit partners and senior managers. We find that releasing earnings before completion of the audit pressures auditors to adopt...

We explore the theoretical relation between earnings and market returns as well as the properties of earnings frequency distributions under the assumption that managers use unbiased accounting information to sequentially decide on real options their firms have and report generated earnings...

This paper reports on an empirical study concerning the stipulation that detailed financial information is more useful for lending decision making. Prior research and other evidence assert that the utility of more detailed data is greater than the utility of (condensed) aggregated data. Since...

We experimentally examine whether audit seniors' use of simple cognitive processes for a complex task is affected by the strength of habits to use these processes that they developed as staff auditors. A habit is a mental association between a behavior and a specific context. We propose that,...

This paper provides a new set of tests on the relationship between product market competition, information processing cost, and production of information by managers. The recent regulation regarding the mandatory adoption of XBRL (eXtensible Business Reporting Language) is a natural experiment...