Prior studies document that managers consider a variety of costs and benefits in their decisions to initiate earnings guidance. Using both an abstract experiment and a survey of experienced financial managers, we provide evidence that managerial overconfidence may also contribute to the decision...

Avoiding continued investment in poorly performing projects is an important function of management control systems. However, prior research suggests that managers fail to use accounting information indicating that a project is performing poorly to discontinue it; that is, they escalate...