Journal of Accounting and Economics Vol. 38 2004
Benefits of a slanted view: a discussion of ‘disclosure bias’
Abstract
Fischer and Verrecchia (J. Account. Econom. (2004), forthcoming) studies a model of imperfect competition in which firms’ disclosures are affected by biased information processing. They find that optimism can add punch to a firm's actions. When facing an optimist, a rival is forced to soften its competitive posture, thereby rendering such biases viable. Although the setting provides a cogent explanation for disclosure bias, its reliance on imperfect information processing introduces some questions. One concern is the ease with which polar results can be obtained when the rules-of-the-game are sufficiently relaxed. The discussion provides examples illustrating this and related issues.
- DOI
- 10.1016/j.jacceco.2004.07.002
- Volume
- 38
- Pages
- 251-262
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref