We examine how the threat of litigation affects an entrepreneur's reporting behavior when the entrepreneur (i) can misrepresent his privately observed information, (ii) pays legal damages out of his own pocket, and (iii) is optimistic about the firm's prospects relative to investors. We find...

type="main" <p>A firm surveys a large number of consumers, some of whom sincerely report their tastes and others of whom report strategically. It makes product decisions using the sample mean of survey responses. When firms and consumers agree on the fraction of sincere consumers, information loss...</p>

We model the relationship between an entrepreneur's monitoring of a manager's performance and the entrepreneur's choice of the firm's financial disclosure policy. The environment is characterized by incomplete contracting and the presence of informed traders. We show that the entrepreneur may...

We study information transmission via polling. A policymaker polls constituents, who differ in their information and ideology, to determine policy. Full revelation is an equilibrium in a poll with a small sample, but not with a large one. In large polls, full information aggregation can arise in...

This paper considers how the presence of a speculative investor, who bets on a firm's future earnings report, affects how the firm's management manipulates that report. We examine the influence of the speculator's information on earnings management behavior, quality of reported earnings, and...

I examine the credibility of a manager's disclosure of privately observed nonverifiable information to an investor in a repeated cheap-talk game setting. In the single-period game no communication occurs. In the repeated game, however, the manager almost always truthfully reveals his private...

This monograph surveys the analytic accounting disclosure literature in which firms strategically communicate information to investors. Its purpose is to identify guidelines that firm management might consider when voluntarily disclosing or mandatorily reporting information to investors and also...

We analyze the board of directors' equilibrium strategies for setting CEO incentive pay and overseeing financial reporting and their effects on the level of earnings management. We show that an increase in CEO equity incentives does not necessarily increase earnings management because directors...

One of the primary roles of corporate boards is to control the processes by which top executives are assessed and if necessary replaced. CEO turnover cannot be viewed in isolation because it affects the behavior of the involved players and hence interacts with other organizational goals. This...