You walk through a shopping mall and spot a pair of expensive sunglasses you have long admired on sale. You debate the pros and cons of splurging and decide not to buy them, but turning a corner, you see that your favorite chocolate shop has a new product on its shelves. It's pricey for chocolate but within your budget, so you buy a box. Or, you have the ... Read More

Confidence is a necessary trait in CEOs. It can help them to be decisive in taking risks, convey their vision and persuade others to follow them. But when confidence crosses the line into overconfidence, or hubris, it can put a firm at a disadvantage. Researchers have shown that overconfident CEOs lead their firms to pay higher acquisition premiums, rely on ... Read More

The Enron collapse in 2001 has become synonymous with accounting fraud. One of the worrying revelations of the case was that advice from the Professional Standards Group of the firms' accountants, Arthur Andersen, was ignored by the partner-in-charge of the Enron file. This has led to questions about what the best relationship framework should be between the ... Read More

Performance evaluations are far from an exact science. Various studies have suggested that the evaluations may be imperfectly designed or that raters have limitations that lead to errors. Perhaps, though, the raters have other goals besides an accurate assessment of their subjects. That's the thrust behind research by Xiaoye May Wang, Kin Fai Ellick Wong and ... Read More

Firms increasingly outsource their information technology (IT) provisions to save money, improve the quality of their services and get access to scarce resources. Revenue from outsourcing in the U.S. is well over $700 billion, but transactions are not as simple as handing over a difficult job to an expert. When firms seek vendors for strategic or ... Read More

The idea that sex sells is as old as the hills, but its use in advertising has become increasingly unsubtle and gratuitous. There is evidence that both men and women find such advertising unethical and manipulative, so why does it continue to be used? Perhaps men and even some women don't really mind this advertising after all, suggest Jaideep Sengupta and ... Read More

Generally accepted accounting principles - or GAAP - are meant to give investors and others a more transparent picture of a company's financial position. However, companies often disclosure non-GAAP earnings in press releases by excluding a number of GAAP earnings components. While corporate managers often claim non-GAAP earnings disclosures help them convey ... Read More

Competition on supermarket shelves is intense and manufacturers and retailers consistently grapple with how to make their brands stand out. Packaging, advertising, placement and consumers' own goals all come into play. A new study sifts through these factors to offer pointers on which matter most. Ralf van der Lans, Rik Pieters and Michel Wedel tracked the ... Read More

The impact of CEO quality on firm decisions is a question that has not been much explored from an accounting point of view. Yet there is strong evidence that CEO reputation can matter here. For instance, manager reputation and career concerns have been shown to affect the assessments of users of financial statements on reporting quality, as well as the ... Read More

In markets for fashion or seasonal goods, such as clothing and cosmetics, or markets characterized by proliferation of new products, such as cars and electronics, manufacturers and retailers both face a challenge. How can they know whether the product will appeal to consumers? Manufacturers typically have more resources to find out this information through ... Read More