Discussion of “Feedback loops, fair value accounting and correlated investments”

Discussion of “Feedback loops, fair value accounting and correlated investments” My paper discusses Bloomfield, Nelson, and Smith’s (BNS) model and experimental study of the price dynamics that arise when a firm’s accounting reports are predictable from its stock returns. This phenomenon occurs when the firm takes a position in an asset that generates unrealized gains and losses (UGL’s) that are correlated with the firm’s own returns. My discussion of BNS focuses on three features that are often used to evaluate research—namely, potential for falsification, internal validity, and external validity. I view and evaluate the BNS paper in light of each of these features. I also briefly comment on how well the paper addresses issues related to fair value accounting. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Accounting Studies Springer Journals

Discussion of “Feedback loops, fair value accounting and correlated investments”

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Publisher
Kluwer Academic Publishers-Plenum Publishers
Copyright
Copyright © 2006 by Springer Science+Business Media, LLC
Subject
Business and Management; Accounting/Auditing; Corporate Finance; Public Finance
ISSN
1380-6653
eISSN
1573-7136
D.O.I.
10.1007/s11142-006-9007-y
Publisher site
See Article on Publisher Site

References

  • The effects of financial incentives in experiments: A review and capital-labor-production framework
    Camerer, C.; Hogarth, R.
  • Capital markets research in accounting
    Kothari, S. P.
  • Experimental research in financial accounting
    Libby, R.; Bloomfield, R.; Nelson, M.

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