Belief Revision in Accounting: A Literature Review of the Belief-Adjustment Model

Kahle, Jennifer B.; Pinsker, Robert E.; Pennington, Robin R.

doi:10.1016/s1475-1488(04)08001-9

Cited by 29 publications

(30 citation statements)

References 26 publications

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“…We further show that experienced participants decide faster when there is uncertainty than inexperienced participants. Moreover, we did not find significant differences in their decisions after waiting, between experienced and inexperienced participants, which is in line with various studies analysing belief revision in managerial contexts (for an overview see Kahle et al 2005).…”

Section: Discussionsupporting

confidence: 91%

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Choice reversal in management decisions: the seductive force of new information

Basel

Brühl

2015

J Bus Econ

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The way in which objectively similar information is presented influences the direction of choice and decisions. Therefore, the sequential order in which information is presented to managers may have a relevant impact on how this information is perceived and evaluated. This study examines the consequences of information pursuit on judgment and decision making (JDM) in managerial decision making. In four experimental JDM-scenarios information pursuit was realised by a step-by-step approach with a time delay in which one group had the option of waiting for additional, non-instrumental information. Results indicate that the acquisition of new information, even if it is non-instrumental, leads to choice reversals (in one out of two scenarios) or to choice enhancement (in one out of two scenarios). In line with social psychology theories, we argue that the mental costs of information gathering lets participants believe that this information is more relevant than the already known facts. Our findings contribute to managerial JDM literature and indicate that cognitive dissonance and self-affirmation can significantly impact choices and decisions during information pursuit.

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Section: Discussionsupporting

confidence: 91%

“…It, therefore, represents a variant of sequential order. Scholars of the belief-adjustment model theorise about the impact of sequential order of information on decision making (Hogarth and Einhorn 1992; Kahle et al 2005). They suggest an anchoring-adjustment process which encodes and evaluates succeeding pieces of information.…”

Section: Introductionmentioning

confidence: 99%

Choice reversal in management decisions: the seductive force of new information

Basel

Brühl

2015

J Bus Econ

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“…Behavioural research suggests that people are reluctant to modify their choices despite being exposed to additional cues indicating that another option is better (Samuelson and Zeckhauser, ; Russo et al ., ). Such behaviour has been commonly explained by three related tendencies: (i) individuals pay greater attention to the initially presented set of information (Hogarth and Einhorn, ; Kahle et al ., ), (ii) individuals are victims of confirmation bias leading them to merely consider information that confirms their decisions (Gilovich, ), and (iii) individuals distort information that runs counter to the initially preferred option (Russo et al ., , ). Empirical studies show that those tendencies also exist among professional users of accounting information (Andersson, ; Kahle et al ., ; Bonner, ; Trotman et al ., ).…”

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

The impact of IFRS goodwill reporting on financial analysts' equity valuation judgements: some experimental evidence

Hellman

Andersson

Fröberg

2016

Accounting & Finance

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This article uses an experiment to investigate how professional financial analysts evaluate a corporate acquisition announced by an IFRS preparer. The findings suggest that professional analysts are affected by preparers' acquisition premium allocations in a potentially misleading way as the participants considered the acquisition to be value-enhancing when the premium was allocated to goodwill, but value-reducing when allocated to identifiable intangible assets. These effects were mitigated at the aggregate level when additional discounted cash flow analysis information was provided; however, there were significant differences in information search behaviour as quite many participants focused primarily on the exploitation of earnings information.

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“…Kahle et al (2005) indicate that auditing research has found different results depending on how the anchor is formulated. According to Epley and Gilovich (2005, p. 202), ''.…”

Section: Anchoringmentioning

confidence: 99%

An investigation of nonprofessional investors’ qualitative materiality judgments incorporating SEC listed vs. non-listed events

Pinsker

Pitre

Daigle

2009

Journal of Accounting and Public Policy

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a b s t r a c tWhen the SEC began listing specific potentially material events in its Regulation FD [Regulation Fair Disclosure, 2000. SEC Release 33-7881, Rules 101-103], it deviated from its long-time ''policy" of not providing materiality guidance to auditors and managers. What is currently unclear in the materiality literature is which factor(s) -information-based characteristics or user-based characteristicshas an effect on nonprofessional investor qualitative materiality judgments. Using a series of experimental markets, we examine and find no evidence that an information-based characteristic (distinguishing between listed and non-listed events) has an effect on nonprofessional investors' materiality judgments. Our evidence regarding user-based characteristics is mixed. We do not find evidence of the direction of disclosed events impacting investors' judgments, but we do find evidence of an anchoring effect. Our findings indicate that the content of the information disclosed to nonprofessional investors is not as important as the timing of the disclosure. Our investigation is unique in that we consider the (qualitative) nature of the event, rather than simply its (quantitative) magnitude.

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Belief Revision in Accounting: A Literature Review of the Belief-Adjustment Model

Cited by 29 publications

References 26 publications

Choice reversal in management decisions: the seductive force of new information

Choice reversal in management decisions: the seductive force of new information

The impact of IFRS goodwill reporting on financial analysts' equity valuation judgements: some experimental evidence

An investigation of nonprofessional investors’ qualitative materiality judgments incorporating SEC listed vs. non-listed events

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