Informed traders’ performance and the information environment: Evidence from experimental asset markets

Ackert, Lucy F.; Church, Bryan K.; Zhang, Ping

doi:10.1016/j.aos.2018.04.002

Cited by 10 publications

(4 citation statements)

References 63 publications

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“…This echoes the observation that there are fewer Clusters I and III articles on reactions to controls in Map B, relative to Clusters I and III articles on using accounting information in decisions in Map A. From a theory standpoint, we identify several calls for conceptual work, such as relying on neuroscience research to develop process models of how incentive designs impact risk-taking behaviors, risk-return trade-offs, or effort choices (e.g., Ackert et al, 2018;Oblak et al, 2018). From a methodological standpoint, several studies suggest using neuroscientific methods such as EEG or fMRI to capture measures of constructs rather than more traditional laboratory measures.…”

Section: Summary Of Future Research Opportunitiesmentioning

confidence: 63%

Is Neuroaccounting Taking a Place on the Stage? A Review of the Influence of Neuroscience on Accounting Research

Tank

Farrell

2021

European Accounting Review

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Insights and technologies from neuroscience research can help accounting scholars more deeply understand how decision-makers physically and cognitively process and react to accounting information and controls. We conduct a systematic review of accounting literature to evaluate whether and how accounting scholars are incorporating neuroscience research into their work and building a field of 'neuroaccounting.' To do so, we identify literature that relates accounting research questions to neuroscience research, addresses accounting questions or tasks but has implications for neuroscience or neuroaccounting research, or investigates accounting questions using neuroscience technologies. We then classify that literature into two broad topic areas analogous to the decision-facilitating (how individuals process information) and decision-influencing (how individuals respond to controls) roles of accounting, and map relationships within each topic over time. We observe that literature in accounting is coalescing into a new field, neuroaccounting, in ways that mirror the pattern of development of a similar field, neuroeconomics -indicating that neuroaccounting is indeed taking a place on the stage of behavioral accounting research. Our review provides a framework for future research at the nexus of neuroscience and accounting that provides unique insights into the 'black box' of cognitive processing in accounting contexts.

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Section: Summary Of Future Research Opportunitiesmentioning

confidence: 63%

Is Neuroaccounting Taking a Place on the Stage? A Review of the Influence of Neuroscience on Accounting Research

Tank

Farrell

2021

European Accounting Review

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“…22 Second, we exogenously endow private information to traders in our experiment. Recent studies have examined the acquisition of private information in the absence of public disclosure (see Ackert et al 2018). How changes in public disclosure affect traders' decisions to become informed is worthwhile to explore.…”

Section: Discussionmentioning

confidence: 99%

Earnings Forecasts and Price Efficiency after Earnings Realizations: Reduction in Information Asymmetry through Learning from Price*

Gong

Tarrant

2020

Contemporary Accting Res

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When information asymmetry is a major market friction, earnings forecasts can lead to higher price efficiency even after the information in forecasts completely dissipates upon earnings realizations. We show this in an experimental market that features information asymmetry (i.e., some traders possess differential private information). Earnings forecasts reduce information asymmetry and lead to prices that reflect a greater amount of private information. Traders can learn more about others' information from prices. This information learned from past prices continues to reduce information asymmetry and improve price efficiency even after earnings realizations. We contribute to the disclosure literature by showing the evidence that the learning‐from‐price effect amplifies the impact of public disclosure on price efficiency.

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“…Dividend payout decisions provide particularly relevant insights into companies by displaying the strategic employment of capital (Agarwal et al. , 2015; Ackert et al. , 2018).…”

Section: Introductionmentioning

confidence: 99%

“…The relation between ownership structure and dividend policy has been the subject of research in many studies over recent decades (Rozeff, 1982;Cronqvist and Nilsson, 2003;Duqi et al, 2020). Dividend payout decisions provide particularly relevant insights into companies by displaying the strategic employment of capital (Agarwal et al, 2015;Ackert et al, 2018). Payout decisions boil down to the opportunity expectations and preferences of managers and owners (with their own principal-agent related problems), as well as to how the decision will be perceived by other stakeholders (Below and Johnson, 1996;Golden and Kohlbeck, 2017).…”

Section: Introductionmentioning

confidence: 99%

Dividend payout decisions under uncertainty: the ownership influence in the early days of the COVID-19 pandemic in Finland

Lindén

Lehner

Losbichler

et al. 2022

JAAR

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PurposeThis paper examines whether ownership type has a moderating influence on dividend payouts during the COVID-19 pandemic crisis with respect to changes in profits. Future uncertainties because of the pandemic will result in a perceived need for liquidity within the company, but retaining cash may be risky for shareholders who could look for less risky alternatives. The dividend payout strategy is thus even more closely related to the overall type concentration and strategy of the owners during the crisis.Design/methodology/approachThe effects are explored and tested on early data from 2019 to 2020 of Finnish companies using ANCOVA while controlling for profitability and sector variables.FindingsA significant effect on dividend payout during the COVID crisis was found when the companies are dominantly held by individual owners validating early suggestions on such an influence. Therefore, this study contributes further to the academic debates on the influence of ownership concentration in times of crises. This study lists certain sectors which experience diminished profits during such a crisis which pinpoints sector separation in future discussions.Research limitations/implicationsThis study explores early data from a specific context in the Nordic countries. However, it does so out of purpose as explained in the paper.Practical implicationsOwnership type and concentration matters when it comes to dividend payout decisions under uncertainty with regard to changes in profit. Investors need to accept these behavioural insights into their decisions.Originality/valueThis study examines the signalling effect of dividends by analysing how actual or anticipated change in profitability due to a crisis is reflected by owners and leads to dividend payout decisions under uncertainty.

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Informed traders’ performance and the information environment: Evidence from experimental asset markets

Cited by 10 publications

References 63 publications

Is Neuroaccounting Taking a Place on the Stage? A Review of the Influence of Neuroscience on Accounting Research

Is Neuroaccounting Taking a Place on the Stage? A Review of the Influence of Neuroscience on Accounting Research

Earnings Forecasts and Price Efficiency after Earnings Realizations: Reduction in Information Asymmetry through Learning from Price*

Dividend payout decisions under uncertainty: the ownership influence in the early days of the COVID-19 pandemic in Finland

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