The evolved brain neuronally processed information on human interaction long before the development of formal accounting institutions. Could the neuronal processes represent the underpinnings of the accounting principles that exist today? This question is pursued several ways: first as an examination of parallel structures that exist between the brain and accounting principles, second as an explanation of why such parallels might exist, and third as an explicit description of a paradigm that shows how the benefits of an accounting procedure can emerge in an experiment.

Conservative information processing bias, Human Information Processing, Decision making, Rational behavior

The article examines probability revision behavior based on data generated by single and joint information systems. The bases for measurement comparison have numbered a few less than the number of measurements themselves. Some authors consider the behavior of income in response to changes in accounting methods. Other authors appeal to underlying economic variables and suggest that some measurements more realistically reflect the economic phenomena than other measurements. The author remarks that, although this research project is germane to several accounting issues, its merit does not lie in the fact that it resolves these accounting issues, but rather that it presents a systematic set of theoretical statements for interpreting the issues and predicting behavior. Messages from an information system discriminate among the underlying set of objects on which the system operates. The ring of an alarm clock discriminates among times of day, a stop sign discriminates among possible operations of an automobile and a book cover discriminates among possible contents of the volume.

Reviews the book "Introduction to Accounting: Economic Measurement for Decisions," by William J. Bruns.

Accounting systems, Incomplete information, Accounting techniques

Compensation plans, Uncertainty, Decision making, Cost variance

Accounting information, Comparative judgement, Numerical information, Decision making

“What economic problems do existing accounting institutions solve?” Experimental economics helps to answer this question. It can be applied to issues in disclosure and auditing, regulation and taxation, and the internal organization of the firm. One can experimentally examine questions such as “Why do firms disclose?” “Why is there a regular issuance of financial statements by firms?”, “Why do managers make forecasts?” “What is the role of regulation in accounting?” “What effects do various tax policies have on the demand for depreciable risky assets?” “What is the role of information in the organization of the firm?” “What costs and benefits are associated with decentralization?” Experimental economics builds the interplay between theory and data, which is necessary for a discipline to become legitimate science. Theory is the guidepost in attempting to construct imaginative examinations of phenomena, and the results of the tests become a basis for revising theory. Experimental economics is a powerful tool for extending understanding of accounting phenomena. Using this tool is not without its limitations. Most experiments make precise choice predictions even though the tastes and beliefs of experimental subjects are at most partially known. Because the phenomena of interest are often quite complex, there are usually several maintained hypotheses. As the complexity of these settings increases, there is also increasing need for statistical contributions. This paper is intended to aid in the development of experimental economics as a research tool in accounting by assisting both those interested in conducting experiments and those interested in assimilating experiments to evaluate experimental work critically. Résumé. «Quels problèmes économiques les institutions comptables existantes résolvent‐elles?: l'economique expérimentale apporte une réponse à cette question. Elle peut se pencher sur des sujets touchant la présentation d'information et la vérification, la réglementation et l'imposition, de même que l'organisation interne de l'entreprise. L'économique expérimentale s'intéresse à des questions comme les suivantes: «Pourquoi les entreprises présentent‐elles de l'information?», «Pourquoi les entreprises publientelles régulièrement des états financiers?», «Pourquoi les gestionnaires font‐ils des prévisions?», «Quel est le rôle de la réglementation en comptabilité?», «Quelles conséquences les diverses politiques fiscales ont‐elles sur la demande d'éléments d'actif amortissables présentant des risques?», «Quel est le rôle de l'information dans l'organisation de l'entreprise?» et «Quels coûts et quels avantages sont associés à la décentralisation?» L'économique expérimentale établit entre la théorie et les faits l'interaction nécessaire à la conversion d'une discipline en une science à part entière. La théorie sert de balise dans les efforts des chercheurs pour créer des façons imaginatives d'analyser les phénomènes, et les résultats de ces examens servent ensuite de fondement à la révision de la théorie. L'économique expérimentale est un instrument puissant permettant d'étendre nos connaissances en ce qui a trait aux phénomènes comptables. L'utilisation de cet instrument comporte, certes, des limites. Les prévisions résultant de la plurpart des expériences reposent sur des choix précis, même si les goûts et les convictions des sujets d'expérience sont, au mieux, partiellement connus. Les phénomènes qui présentent un intérêt étant souvent assez complexes, plusieurs hypothèses sont habituellement posées. Et plus les cas se complexifient, plus le rôle de la statistique revêt de l'importance. Les auteurs ont pour but de favoriser le développement de l'économique expérimentale à titre d'instrument de recherche en comptabilité en aidant à la fois ceux qui s'intéressent à la poursuite d'expériences et ceux qui s'intéressent à l'assimilation de ces expériences dans le but de procéder à l'évaluation critique des travaux expérimentaux.

Accounting and finance researchers show semi-strong form efficiency or lack thereof by using sequences of prices from Center for Research in Security Prices (CRSP) and Compustat data for which there is no model for how these prices arise from individual decisions. One needs a setting in which prices (including bids and asks) as well as information about individuals making the choices are both available. To begin to bridge the gap between theory and data, we extend work done by experimental economists on the double auction and model price formation that is or is not semi-strong efficient. Agents in the model uncover prices in a manner consistent with Hayek's notion of price discovery (Hayek 1948).