Results from the Iowa Political Stock Market are analyzed to ascertain how well markets work as aggregators of information. We find that the market worked extremely well, dominating opinion polls in forecasting the outcome of the 1988 presidential election, even though traders in the market exhibited substantial amounts of judgment biases. Our explanation is that judgment bias refers to average behavior, while in markets it is marginal traders who influence price. We present evidence that in this market a sufficient number of traders were free of judgment bias so that the market was able to work well.

Experimental duopolies are analyzed to answer two questions: Are asymmetric duopolies less likely to collude than symmetric duopolies? Is the time it takes to reach an equilibrium affected by asymmetry? In a repeated game where output is the choice, we have data 19 (respectively, 21) subject pairs where both agents are low-cost (respectively, high-cost) and 25 subject pairs where one agent in high-cost and one is low-cost. Subjects make choices for at least 35 periods. Results indicate that asymmetric markets are less cooperative and take longer to reach equilibrium than symmetric markets.

[Much of the past research in accounting ethics has focused on whether accountants conform to prescribed codes of professional ethics. Other research has been normative in nature, recommending what constitutes appropriate ethical conduct or focusing on the accountant's responsibility in society. This study selects a different approach by testing a multivariate measure of how accountants make ethical judgments. Data were gathered with the assistance of the Institute of Certified Management Accountants and the Institute of Management Accountants (formerly the National Association of Accountants). Accountants were asked to respond on bipolar scales to realistic scenarios involving ethical decisions. Several tests for construct validity produced supportive results for the hypothesized three-dimensional measure, with the dimensions being moral equity, relativism, and contractualism. First, we developed a questionnaire with four scenarios concerning ethical issues. Each scenario ended in a particular action taken by an individual. Responses to that action were recorded on eight bipolar scales, representing the three dimensions above. The questionnaire was mailed to 500 randomly selected certified management accountants resulting in a 62.8 percent response rate. Second, the results from a factor analysis and a traditional reliability coefficient test suggest that a high degree of internal consistency exists for each dimension of the measure. The appropriate factor loadings ranged from a low of 0.68 to a high of 0.92, while the reliability coefficients varied from 0.75 to 0.92. Next, the content validity of the three-dimensional measure was checked by comparing it with a global ethical/unethical measure. Again, the results support the hypothesis that the multivariate measure captures the appropriate domain of content. Adjusted R2 -values ranged from 0.59 to 0.76 when the global measure was regressed against the multivariate measure. Finally, a sense of predictive validity was obtained by comparing the multivariate measure with a behavioral intention measure for the respondent. Adjusted R2 -values ranged from 0.45 to 0.76 for the four scenarios tested, indicating that the three-dimensional measure "explains" a respectable portion of the variance in the behavioral intention of the individual. The multidimensional measure developed in this study may be a guide for future research into how accountants make ethical judgments. Such knowledge can be used in turn to develop useful codes of conduct, create ethical organizational cultures, and direct ethical training for and by accountants.]

This paper examines daily excess bond returns associated with announcements of additions to Standard and Poor's Credit Watch List, and to rating changes by Moody's and Standard and Poor's. Reliably nonzero average excess bond returns are observed for additions to Standard and Poor's Credit Watch List when an expectations model is used to classify additions as either expected or unexpected. Bond price effects are also observed for actual downgrade and upgrade announcements by rating agencies. Excluding announcements with concurrent disclosures weakens the results for downgrades, but not upgrades. The stock price effects of rating agency announcements are also examined and contrasted with the bond price effects.

Recent models of firm investment decisions stressing informational imperfections in capital markets provide a foundation for interpreting evidence that movements in internal finance can predict investment spending, even after one controls for measures of firms' investment opportunities. While such evidence is suggestive, it is often open to other interpretations. We examine these models using data on equipment investment in the U.S. agricultural sector. This sector is particularly interesting because it has experienced large fluctuations in net worth and the profitability of investment, and reasonable measures of net worth can be constructed. Our findings provide support for a class of "internal funds" models of investment under asymmetric information.

In a 1976 survey, Kearl et al. (1979; hereafter, 1976 survey) concluded that the then widespread perception that there was little agreement among professional economists on matters of theory or policy was simply wrong. However, the most casual empiricism, namely the continuing popularity of jokes about disagreements among economists, suggests the perception of noneconomists has not changed much since the 1970's. What is the present state of consensus among economists? This question is of interest because more than a decade has elapsed since the 1976 survey and during this time many issues confronting economists and the composition of the profession have changed.1 Benjamin M. Friedman and Lawrence H. Summers (1991 p. ix), for example, have asserted that ...economic thinking in many subfields of the discipline now differs markedly from what it was in 1970.... Consensus among European economists has been examined by Bruno S. Frey et al. (1984). Martin Ricketts and Edward Shoesmith (1990, 1992) focus exclusively on British economic opinion. This paper provides the first general analysis of opinions of U.S. economists in more than a decade. I. The Survey and Questionnaire