12 econ papers (every accountant should read)

1. Bayesian persuasion, by E. Kamenica and M. Gentzkow (AER 2011)

because it lays out with elegance and simplicity the general solution to a vast class of disclosure games with commitment.

2. Unique equilibrium in a model of self-fulfilling currency attacks, by S. Morris and H. Shin (AER 1998)

because it provides the building block for uniquene equilibrium in models with strategic complementarities.

3. Information revelation and certification intermediaries, by A. Lizzeri (Rand 1999)

because it establishes the problems that arise when a price-discriminating expert holds a monopoly on certification.

4. Dynamic security design, by B. Biais, T. Mariotti, G. Plantin, and J. Rochet (RES 2007)

because it offers tractable dynamic theory of the balance sheet.

5. Financial intermediation, loanable funds and the real sector, by B. Holmstrom and J. Tirole (QJE 1997)

because it develops a general equilibrium theory of the role of collateral.

6. Has moral hazard become a more important factor in managerial compensation?, by G. Gayle and R. Miller (AER 2009)

because it estimates a structural model of managerial incentives.

7. Acquisition and disclosure of information prior to sale, by S. Shavell (Rand 1994)

because it demonstrates that voluntary disclosure generally induces excessive information acquisition.

8. Using privileged information to manipulate markets: Insiders, Gurus and Credibility, by R. Benabou and G. Laroque (QJE 1997)

because it offers a simple model of manipulation of non-verifiable information.

9. The survival of noise traders in financial markets, by J. De Long, A. Schleifer, L. Summers and R. Waldman (JB 1991)

because it scientifically analyzes the hypothesis that some traders have mispecified expectations.

10. An incomplete contracts approach to financial contracting, by P. Aghion and P. Bolton (RES 1992)

because it provides the main framework for many models of incomplete contracts.

11. Why Has CEO Pay Increased So Much?, by X. Gabaix and A. Landier (QJE 2008)

because it shows how a simple model of CEO talent and power laws helps design the empirical analyses of CEO compensation and interpret its results.

12. Mutual fund flows and performance in rational markets, by J. Berk and R. Green (JPE 2004)

because it unravels what is really going on within active money management funds.