Topic:Coordinated Inattention and Disclosure Complexity

Lecturer:Hong Qu

Hong Qu is an associate professor of Accounting at Kennesaw State University and an associate editor of the Journal of Accounting Research. She has served as a member of the Research and Development Committee and the Faculty Recruitment Committee of Kennesaw State University. She has long been committed to applying experimental research methods to theoretical research on accounting, economic and organizational behavior. Her main research areas include how public disclosure affects price efficiency, how investors handle accounting disclosure, and how coordinated incentives affect investors' decisions to analyze accounting disclosure. In The Journal of Accounting Research,The Accounting Review, Contemporary Accounting Research,Journal of Economic Behavior and Organization, Economics Letters and other top international journals,she has published a number of academic papers.

Abstract:

We examine a beauty contest game with an option to analyze an additional dis-closure. We analytically prove that in some scenarios, coordination incentives cause sophisticated players who can comprehend disclosures to choose not to analyze them to match unsophisticated player’s actions, a phenomenon we call "Coordinated inattention." Laboratory experiments provide support for the coordinated inattention mechanism Coordination incentives reduce sophisticated subjects' propensity to analyze disclosures, especially when they believe others are unlikely to comprehend them. We further find that psychological biases help reduce coordinated inattention. Subjects are overconfident, sophisticated subjects overestimate others' ability to comprehend disclosures, and both biases are associated with a higher tendency to analyze disclosures.

Time:9:30a.m-11:00p.m,May 26th,2024

Venue:B609,YiFuXinxiBuilding,Central Campus