anonymous referee and seminar participants at University of Minnesota for their comments and suggestions. Abstract This paper examines how various revenue recognition rules affect the incentive properties of accounting information in a stewardship setting. Our analysis demonstrates that if revenues are recognized according to the realization principle, a… (More)
anonymous referee and workshop participants at the University of Minnesota and the Experimental Science Association Meetings for their helpful comments and discussions. Abstract We combine two research lines: preference reversal research (Lichtenstein and Slovic, 1971) and research on lottery-based risk preference induction (Roth and Malouf, 1979). Our… (More)
Sivaramakrishnan for many helpful suggestions. The present version contains a considerable expansion of the earlier analysis.
We examine uniform and discretionary regimes for reporting information about …rm performance from the perspective of a standard setter, in a setting where the precision of reported information is di¢ cult to verify and the reported information can help coordinate decisions by users of the information. The standard setter's task is to choose a reporting… (More)
We test the hypotheses that (i) poor accounting quality is associated with delayed stock price adjustment to information, and (ii) investors require higher future stock returns for the price delay associated with poor accounting quality. We define accounting quality as the precision with which financial reporting informs equity investors about future cash… (More)
We investigate the ability of forecast patterns to convey information about an analyst's predictive ability. We establish an equilibrium strategy where the analyst issues a forecast only if the realization of his private signal exceeds a threshold. In equilibrium, higher-ability analysts choose higher thresholds than lower-ability analysts, and investors… (More)