Published Papers

I distribute current versions of my working papers on my SSRN webpage



(see papers below, letters A-F refer to WP in My Homepage)

By topic:
Agency Theory [6, 8, 13, 17, 19, 30, 32, C]
Bayesian Persuasion [12, 24, 27, 31]
Conservatism [10, 12, 17, 30, 33]
Cost of Capital [3, 7, 8, 12-14, 19, 30]
Earnings Management [ 7, 13, 16, 17, 25, 26, 32, A, B]
Political Economy [4, 5, 10, 11, 20, D]
Product/Labor Market [1, 2, 9, 23]
Voluntary Disclosure [3, 6, 9, 16, 18, 21, 23, 24, 27, 28, 31, 32, 35, 36, B]

By method:
Applied Theory [1-13, 16-18,  20, 24, 27, 30, 31, 35, 36]
Machine Learning [22, 26, 33]
Structural Estimation [15, 21, 25, 28, A, B, C]
Survey and Discussions [7, 13-15, 22, 32, 34, 35]
Theory and Empirical [14, 19, 23, 31, 34, 35, 37, B, D]


37. Mesuring DeFi Risk, with X. Martin and I. Sall, Financial Research Letters

An easily implementable to measure the risk of Decentralized Finance platforms under the assumption of two synthetic investors.

36. Disclosure Paternalism, Journal of Accounting and Economics, forthcoming, covered in FinReg Blog

Behavioral investors dynamically learn to price protect against strategic disclosure. Counter-intuitively, regulators intervene to reduce investor losses but, in doing so, disrupt the learning process and cause the very errors they intervene to resolve.

35. Managers' Choice of Disclosure Complexity, Journal of Accounting and Economics, forthcoming, supplementary appendix

A discussion of Aghamolla and Smith's (2023) excellent forthcoming paper, with a simpler model to capture complexity: complexity is (i) bad and (ii) worse if investors are more sophisticated.

34. Statistical versus Economic Significance in Accounting: A Reality Check, Accounting, Economics, and Law: A Convivium, forthcoming

Why research is not about statistical significance but about economically meaningful measurements.

33. Using Machine Learning to Measure Conservatism, with E. Cheynel, Y. Liao and M. Milone, Management Science forthcoming, download or run the measure here 

Use machine learning to improve a proxy, applied in the context of conservatism.

32. A Primer on Structural Estimation in Accounting Research, with Y. Liang and I. Marinovic, Foundations and Trends in Accounting forthcoming, Github code

A gentle introduction to methods in structural by example from recent work in accounting. Offers a simple bootstrap to handling all standard-errors and tests.

31. Disclosure and Investor Inattention, with K. Hu and Y. Liu, The Accounting Review forthcoming, online appendix here

In a model with rational inattention, the optimal allocation of attention implies an inverse U-shaped relationship between voluntary disclosure and attention; we also provide empirical evidence.

30. Toward a General Equilibrium Theory of Financial Reporting, with E. Cheynel, Contemporary Accounting Research forthcoming, online appendix here

A non global games explanation to self-fulfilling accounting-led crises. Accounting standards are set excessively tough -> firms compete more for scarce capital -> high cost of capital -> accounting standards must be tough (self-fulfilling!!). Paper shows that better competitive equilibria exist, but may not be easy to reach.

29. Interplay between Accounting and Prudential Regulation, with H. Sapra and L. Mahieux, The Accounting Review forthcoming, online appendix here

Real effects in a banking setting:  capital ratios and partial reporting requirements work as complements to induce ex-ante optimal intervention. Partial information about expected loss model serves a commitment device to increase intervention ex-post.

28. The Dynamics of Concealment, with I. Marinovic, S. Terry and F. Varas, Journal of Financial Economics (2022)
free published version available here, code

Estimate a reputational Dye where managers disclose today by considering the effects of their disclosure on future prices: counter-intuitively, reputations decrease disclosure but only modest info. losses from strategic withholding.

27. Strategic Withholding and Imprecision in Asset Measurement, with E. Cheynel and D. Cianciaruso,  Journal of Accounting Research (2021), online appendix here

Imprecision can credibly commit the manager withhold less - which is good! - nevertheless, it increases efficiency if and only there are disclosure costs or benefits (but not with info. endowment uncertainty a la Dye only). Further, imprecision is always at the lowest disclosure, i.e., at the bottom.

26. Using machine learning to detect misstatements, with E. Cheynel, E. Floyd and W. Pan, Review of Accounting Studies (2021) code and measure.

Using ML to predict misstatements, shows that accounting variables alone are not useful to predict misstatements but become (the most) important variables in conjunction with auditing variables.

25. How Pervasive is Earnings Management? Evidence from a Structural Model, with E. Cheynel, E. Li and Y. Liang matlab code, Management Science (2021)

A simple closed-form estimation procedure to structurally estimate reporting biases (they appear to be modest!).

24. Voluntary versus Mandatory Disclosure, with J. Xue and I. Vaysman, Review of Accounting Studies (2021)

A law that requires the disclosure of bad news reduces the cost of excessive voluntary disclosures.

23. Tacit Collusion and Voluntary Disclosure: Theory and Evidence from the U.S. Automotive Industry, with H. Evans, M. Feng and A. Tseng SAS code, Management Science (2021)

Anomalous disclosure patterns in the auto industry are rationalized in a model of collusion in the product market.

22. Machine learning improves accounting: discussion, implementation and research opportunities, Review of Accounting Studies (2020)
Python Code: portable code to run parallelized Gradient-Boosted Regression Trees

A discussion at the 2020 RAST conference, with an introduction with code examples to running machine learning in Python (sklearn) and common problems in panels.

21. How often do managers withhold information?, with I. Marinovic and P. Ma matlab code, Accounting Review (2020)

A simple structural estimation of the Dye-Jung-Kwon voluntary disclosure model, using management forecasts.

20. Voting over disclosure standards, with R. Magee and G. Schneider, European Accounting Review (2019)

For any accounting standard, there is always another that's near-unanimously preferred. If one only allows small changes to standards, a qualified majority of 2/3 or more will implement agreement on full-information.

19. Are the Fama French Factors treated as Risk? Evidence from CEO compensation, with E. Cheynel and M. Liu-Watts, European Financial Management (2018)

We prove and implement a new asset pricing test, showing that an association to performance-pay indicates that a factor contains systematic risk.

18. Verifiable disclosure, with D. Cianciaruso, Economic Theory (2018)

A refinement and algorithm to construct unique equilibria in general disclosure games. Sender is always worse-off if an uninformed regulator enforces more disclosure.

17. Optimal conservatism with earnings manipulation, with M. Darrough and W. Xue, Contemporary Accounting Research (2017)

A theory of earnings management, contracting and conservatism: comparative statics provide empirical predictions about accounting quality, manipulation, bonus/PPS, etc.

16. A theory of hard and soft information, with I. Marinovic, The Accounting Review (2016)

A theory of financial reporting when some information is unverifiable.

15. From Casual to Causal Inference in Accounting Research: The Need for Theoretical Foundations, with A. Beyer and D. Taylor, Foundations and Trends in Accounting (2016)

A survey of the links between empirical and theoretical research accounting, with an application to estimating disclosure costs in Verrecchia (1983).

14. Diagnostics to Evaluate Cost of Capital Measures: A DiscussionAbacus (2016)

I show how cost of capital measures derived from structural equations models (SEM) can be tested, with mixed results.

13. Disclosure and the Cost of Capital: a Survey of the theoretical literature, with E. Cheynel, Routledge Companion to Accounting Theory (2015), republished in Abacus (2016)

A survey of the theory on the relation between information and the cost of capital.

12. Asset measurement in imperfect credit markets, with E. Cheynel, Journal of Accounting Research (2015)

Optimal persuasion before a firm seeks financing from the credit market. The firm may increase or decrease information release as a function of its need for collateral. 

11. Political pressures and the evolution of disclosure regulation, with R. Magee, Review of Accounting Studies (2015)

The process of political regulation slowly raises the amount of reporting, and then suddently regulates. The resulting cycle repeats. 

10. Mandatory Disclosure and asymmetry in financial reporting, with R. Magee, Journal of Accounting and Economics (2015)

In a political game, an endogenous mandatory disclosure level emerges with mandatory reporting for low events. This need not be what is efficient ex-ante.

9. Disclosure policy and industry fluctuations, with P. Liang, Management Science (2015)

Firms optimally manage their disclosure dynamically in an oligopoly, censoring disclosures over extreme events.

8. Incentive contracts, market risk and the cost of capital, Contemporary Accounting Research (2015)

Agency problems do not directly affect the economy-wide cost of capital, except possibly via their effect of total output.

7. Discussion of earnings manipulation and the cost of capital, Journal of Accounting Research (2013)

I develop a simple model in which aggregate manipulation explains expected returns in an asset pricing framework.

6. Economic Consequences of Equity Compensation Disclosure, Journal of Accounting, Auditing and Finance (2013)

A model in which better firms signal quality to the market with higher pay-performance coefficients, so that public disclosure distorts contracts.

5. Toward a positive theory of disclosure regulation: in search of institutional foundations, with E. Cheynel, The Accounting Review (2013)

A comparison of various forms of accounting regulation; competing standard-setting bodies largely solves the problem.

4. From low quality reporting to financial crises: politics of disclosure regulation along the economic cycle, with R. Magee, Journal of Accounting and Economics (2011)

The quality of accounting regulation declines before a recession, implying entry by 'bad' firms, and furthering the demand for bad accounting: things blow up when the economy becomes sufficiently bad.

3. Capital structure, voluntary disclosures and cost of capital, with A. Beyer and R. Dye, The Accounting Review (2011)

Design an optimal security for a firm that will make a voluntary disclosure.

2. Endogenous shakeouts, International Journal of Industrial Organization (2009)

Entry game that rationalizes features excess entry, due to strategic uncertainty, followed by excess exit.

1. Can labor markets help resolve collusion, Economic Letters (2007)

By inspecting demand from the labor market, the firm can identifies collusion among employees.