The standard hedonic model of durable assets is a special case of a more general model that contains two additive terms: (1) use value of the existing hedonic vector and (2) the value of the option to reconfigure hedonic characteristics. One empirical implication is that the two parts of value...

This study examines short-term market reaction to financial statement restatements conditional on the initial level of noise in a restated account. I find evidence suggesting that the initial degree of estimation of restated items is an important determinant of market reaction. Investors do not...