論文ID: 3.2013.02
We experimentally explore how common knowledge provided by accounting systems affectsinvestors' decision and shapes the formation of security prices over time. We design alternativeaccounting structures and run experiments in artificial security markets framed by these structures.In sessions where investors receive exogenous accounting information about ultimate earnings,prices converge to the fundamental levels derived from those earnings through backward induction.Accounting plays a role for the market. In sessions where investors receive endogenous accountinginformation about earnings that are linked to the ongoing clearing price of the security, market pricelevels and paths become indeterminate and lose earnings anchor; investors tend to form theirexpectations of future prices by forward, not backward, induction. Accounting plays its role from themarket, and loses its relevance in financial decision‐making. These laboratory results suggest thataccounting information and its overarching structure are important to prevent market exuberance,excess volatility and the formation of financial bubbles. They further have relevant effects on marketallocative efficiency, and revenue and wealth distribution among investors.
