We examine the role and economic consequences of emotions in influencing the judgment of corporate executives. Analyzing a large sample of U.S. public firms, we find that sunshine-induced good mood leads managers to make upwardly biased earnings forecasts. Importantly, our evidence implies that...

Rule compliance is an important way to achieve and sustain cooperation in large-scale societies. In this study, we investigate the impact of social identity on rule following behavior. First, using large-scale traffic violation data from a major city in China, we empirically showed that traffic...

Motivated by the prevalence of experimentation in online platforms and social networks, we consider the problem of designing randomized experiments to assess the effectiveness of a new market intervention for a network of users. An experiment assigns each user to either the treatment or the...

This paper investigates how auditors respond, in terms of their pricing and audit work, to a reduction of clients' financial reporting discretion upon the implementation of FIN 46R “Consolidation of Variable Interest Entities” in year 2003. The accounting standard mandatorily requires firms...