An Experimental Study on Presentation Format Effect of Income Statement: Evidence from a Modified Ultimatum Bargaining Game Experiment

15 Pages Posted: 5 Feb 2010

See all articles by Satoshi Taguchi

Satoshi Taguchi

Doshisha University; Osaka University - Graduate School of Economics; Kobe University - Research Institute for Economics & Business Administration

Multiple version iconThere are 2 versions of this paper

Date Written: February 3, 2010

Abstract

In this paper, we have considered whether accounting disclosure format would affect decision-making of investor by experiments. We have two research questions.

The First question is whether decision-making of investors would be different when the source of corporate income is presented or not. The second question is whether decision-making of investors would be different when corporate income earned by operating activities or financial activities is presented.

Our experiments proved the presentation format effect on income statement. The result shows that investors would see the source of income when they decide, so presentation format in financial statement is very important. The results of these experiments will change the direction of the entire study of disclosure of accounting information.

Keywords: experiment, disclosure, presentation format effect, mental accounting, investor, ultimatum bargaining game, earnings, dividend, operating activity, financial activity, game theory, neuroeconomics

JEL Classification: C70, C91, M41

Suggested Citation

Taguchi, Satoshi, An Experimental Study on Presentation Format Effect of Income Statement: Evidence from a Modified Ultimatum Bargaining Game Experiment (February 3, 2010). Available at SSRN: https://ssrn.com/abstract=1546915 or http://dx.doi.org/10.2139/ssrn.1546915

Satoshi Taguchi (Contact Author)

Doshisha University ( email )

Karasuma-Imadegawa Kamigyo
Kyoto 602-8580
Japan

Osaka University - Graduate School of Economics

1-7 Machikaneyama
Toyonaka, Osaka, 560-0043
Japan

Kobe University - Research Institute for Economics & Business Administration

2-1, Rokkodai cho
Nada-ku
Kobe, 657-8501
Japan

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