This paper examines the role of management's earnings preannouncements on judgments about its trustworthiness by nonprofessional investors. We predict that management's preannouncement decision and the resulting direction of the earnings surprise influence investors' ethical judgments about management's trustworthiness; these judgments, in turn, are associated with investors' other investment related judgments. We test our predictions in an experiment in which MBA students make investment-related judgments under four different preannouncement strategies. Consistent with our predictions, the results of our study show that (...) managers' preannouncement decisions are significantly associated with investors' evaluations of management's trustworthiness. Specifically, holding the size of the earnings surprise constant, we find that judgments of management's trustworthiness are damaged more following a negative as opposed to a positive earnings surprise, and the release of a preannouncement compared to when management does not issue a preannouncement. Also consistent with our predictions, we find that evaluations of management's trustworthiness are significantly and positively associated with judgments of the attractiveness of the firm's equity as an investment. Based on our findings, we encourage further research to explore whether managers understand the trust implications associated with their preannouncement decisions and the extent to which this understanding influences their disclosure decisions. (shrink)

The Cyrenaic school was a fourth-century BC philosophical movement, related both to the Socratic tradition and to Greek Scepticism. In ethics, Cyrenaic hedonism can be seen as one of many attempts made by the associates of Socrates and their followers to endorse his ethical outlook and to explore the implications of his method. In epistemology, there are close philosophical links between the Cyrenaics and the Sceptics, both Pyrrhonists and Academics. There are further links with modern philosophy as well, for the (...) Cyrenaics introduced a form of subjectivism which in some ways preannounces Cartesian views, endorsed by Malebranche and Hume and developed by Kant. This 1998 book reconstructs Cyrenaic epistemology, explains how it depends on Cyrenaic hedonism, locates it in the context of ancient debates, and discusses its connections with modern and contemporary epistemological positions. (shrink)

The pantheon of classical liberal thinkers must honor the memory of one brilliant mathematician, scientist, and debunker of superstitious beliefs, the sound-money advocate Nicole Oresme. Although his opposition to the recoinage practices of the French monarchy was not unprecedented in the fourteenth century, Oresme must be credited with anticipating the “rational expectations” in economics when he distinguished quite forcefully between “preannounced debasement” and “secret debasement” and their effects on the distribution of wealth. Oresme explains that the king should not practice (...) secret debasement, and can appear as a pioneer for modern ideas on monetary surprises. (shrink)

The Cyrenaic school was a fourth-century BC philosophical movement, related both to the Socratic tradition and to Greek Scepticism. In ethics, Cyrenaic hedonism can be seen as one of many attempts made by the associates of Socrates and their followers to endorse his ethical outlook and to explore the implications of his method. In epistemology, there are close philosophical links between the Cyrenaics and the Sceptics, both Pyrrhonists and Academics. There are further links with modern philosophy as well, for the (...) Cyrenaics introduced a form of subjectivism which in some ways preannounces Cartesian views, endorsed by Malebranche and Hume and developed by Kant. This book reconstructs Cyrenaic epistemology, explains how it depends on Cyrenaic hedonism, locates it in the context of ancient debates, and discusses its connections with modern and contemporary epistemological positions. (shrink)

The Securities and Exchange Commission requires publicly held US corporations to disclose all information, whether it is positive or negative, that might be relevant to an investor's decision to buy, sell, or hold a company's securities. The decisions made by corporate managers to disclose such information can significantly affect the judgments and decisions of investors. This paper examines academic accounting research on corporate managers' voluntary disclosures of earnings forecasts and non-GAAP earnings measures. Much of the evidence from this research indicates (...) that some managers engage in opportunistic disclosure behavior that often benefits one group (managers and shareholders) at the expense of other groups (often other investors). The paper concludes by discussing the ethical implications of this behavior. (shrink)