Is this you? As a journalist, you can create a free Muck Rack account to customize your profile, list your contact preferences, and upload a portfolio of your best work.
Claim your profile
Home | Faculty & Research Overview | Research This paper examines how posterior default probability influences firms' disclosures and asset prices distinctly relative to posterior variance. In the presence of limited liability, we predict that firms' disclosure probability decreases if and only if the posterior default probability (following a public signal) increases. In contrast, the posterior variance following a public signal has no impact on firms' disclosure policies.
Using misstatement data, we find that the distribution of detected fraud features a heavy tail. We propose a theoretical mechanism that explains such a relatively high frequency of extreme frauds. In our dynamic model, a manager manipulates earnings for personal gain. A monitor of uncertain quality can detect fraud and punish the manager. As the monitor fails to detect fraud, the manager's posterior belief about the monitor's effectiveness decreases.
As a journalist, you can create a free Muck Rack account to customize your profile, list your contact preferences, and upload a portfolio of your best work.
