(PhD) Accounting and Information Economics

The course is focused on information economics-based accounting theory. We will typically begin each topic with a discussion of the institutional environment and classical (pre-information economics) accounting theory. The role of information economics in the course is largely one of trying to understand the accounting institutions we observe in practice (positive accounting theory), while also developing new empirical predictions. Although not our focus, we will devote some time to papers that test these predictions, both qualitatively and quantitatively. We will also study normative theories and foundational topics. In general, the goal is to use theory to organize our thinking. The course will also cover some of the history of accounting institutions in the U.S., as well as the history of accounting thought. As you read the papers, think about the following. What is the author trying to accomplish? What’s new, and so what? Which assumptions are simplifying ones made to make the analysis tractable, and which ones are key economic drivers of the results? Are the assumptions reasonable? Is the distance between the assumptions and results large enough that a model is needed? What is the key economic intuition, and is it explained clearly? Is the theory useful as a way of organizing your thinking about the topic? What would you have done differently, and why? What’s next? (Think broadly, including about how the model might be used/adapted in empirical research.)