Discussion of 'Limited Attention, Information Disclosure, and Financial Reporting'

Posted: 14 Jan 2004

See all articles by Richard A. Lambert

Richard A. Lambert

University of Pennsylvania - Accounting Department

Abstract

This paper discusses Hirshleifer and Teoh's modeling and analysis of "inattentive investors," stock price valuation, and accounting recognition rules and disclosures. The paper derives many plausible empirical predictions from an equilibrium model in which some investors do not process information "fully" or correctly. My discussion focuses on the underlying features of the analysis that drive these results, and speculates as to the robustness of key results. In particular, the systematic "mis-pricing" that persists for long periods of time in the model is very controversial.

Keywords: capital markets, market efficiency, disclosure

JEL Classification: D82, D83, G14, M41, M45

Suggested Citation

Lambert, Richard, Discussion of 'Limited Attention, Information Disclosure, and Financial Reporting'. Journal of Accounting & Economics, Vol. 36, Nos. 1-3, pp. 387-400, December 2003. Available at SSRN: https://ssrn.com/abstract=485143

Richard Lambert (Contact Author)

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States
215-898-7782 (Phone)
215-573-5463 (Fax)

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