Economizing Principle in Accounting Research

22 Pages Posted: 20 Sep 2006

See all articles by Shyam Sunder

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Multiple version iconThere are 2 versions of this paper

Date Written: September 21, 2005


Joel S. Demski's work is characterized by the austere discipline of applying the economizing principle to accounting and management phenomena. In natural sciences optimization is used as a structural principle for understanding the organization of the physical universe. As social scientists applied it to our self-conscious selves, economizing acquired a behavioral interpretation, leading to unnecessary and avoidable confusion with the findings of cognitive sciences. Important aspects of aggregate level outcomes of social phenomena are structural. The use of the economizing principle for understanding social phenomena in general, and accounting in particular, has been highly productive, and it is not in conflict with cognitive limitations of human individuals. Demski's work defines the application of this powerful principle to problems of accounting.

Keywords: economizing principle, self-selection, employee stock options, integrated financial-tax accounting, audit failures

JEL Classification: M40, M41, M49

Suggested Citation

Sunder, Shyam, Economizing Principle in Accounting Research (September 21, 2005). Available at SSRN: or

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

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New Haven, CT 06520-8200
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203-432-6160 (Phone)


Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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