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Full-Text Articles in Business
The "Play-Out" Effect And Preference Reversals: Evidence For Noisy Maximization, Joyce E. Berg, John Dickhaut, Thomas A. Rietz
The "Play-Out" Effect And Preference Reversals: Evidence For Noisy Maximization, Joyce E. Berg, John Dickhaut, Thomas A. Rietz
Accounting Faculty Articles and Research
In this paper, we document a "play-out" effect in preference reversal experiments. We compare data where preferences are elicited using (1) purely hypothetical gambles, (2) played-out, but unpaid gambles and (3) played-out gambles with truth-revealing monetary payments. We ask whether a model of stable preferences with random errors (e.g., expected utility with errors) can explain the data. The model is strongly rejected in data collected using purely hypothetical gambles. However, simply playing-out the gambles, even in the absence of payments, shifts the data pattern so that noisy maximization is no longer rejected. Inducing risk preferences using a lottery procedure, using …
Human Economic Choice As Costly Information Processing, John Dickhaut, Vernon L. Smith, Baohua Xin, Aldo Rustichini
Human Economic Choice As Costly Information Processing, John Dickhaut, Vernon L. Smith, Baohua Xin, Aldo Rustichini
Accounting Faculty Articles and Research
We develop and test a model that provides a unified account of the neural processes underlying behavior in a classical economic choice task. The model describes in a stylized way brain processes engaged in evaluating information provided by the experimental stimuli, and produces a consistent account of several important features of the decision process in different environments: e.g., when the probability is specified or not (ambiguous choices). These features include the choices made, the time to decide, the error rate in choice, and the patterns of neural activation. The model predicts that the further two stimuli are from each other …
Further Evidence On The Ability Of Fifo And Lifo Earnings To Predict Operating Cash Flows: An Industry Specific Analysis, Brock Murdoch, Bruce Dehning, Paul Krause
Further Evidence On The Ability Of Fifo And Lifo Earnings To Predict Operating Cash Flows: An Industry Specific Analysis, Brock Murdoch, Bruce Dehning, Paul Krause
Accounting Faculty Articles and Research
The continuing convergence of U.S. GAAP with International Accounting Standards has brought into question the future use of the LIFO inventory method in the U.S. Since the Financial Accounting Standards Board (2010) has stipulated that earnings should aid investors and creditors in their quest to forecast future cash flows to the enterprise, this research examines whether FIFO earnings or LIFO earnings is preferable, for this purpose, as an aid to ex ante operating cash flow itself,over a three-year forecast horizon. We conclude that ex ante operating cash flows are quite useful in forecasting operating cash flows across industries for up …