Students should read the papers assigned for each lecture and be ready to engage in discussion and problem-solving. We will go over selected papers and one or two illustrative problems during each lecture. The illustrative problems are intended to highlight the critical tensions and insights extracted from the papers. Accordingly, lectures will generally revolve around these problems.

After the morning sessions, there will be periods of time in which students break out and work on problems related to the work presented in the morning. Generally, these problems stem from existing papers in the literature, which build upon the frameworks developed in the papers dis­cussed in the morning session.

Detailed Program

Day 1: Social Norms and Ethical Motivations for Honest Accounting

Pre-Reading

Paul Fischer and Steven Huddart, Optimal Contracting with Endogenous Social Norms, American Economic Review, Volume 98, Number 4, 1459-1475, September 2008.

Steven Huddart and Hong Qu, Peer influences on honesty in managerial reporting: the role of social norms and social references, Working Paper, Penn State University, 2012.

  • 09:00 am to 12:30 pm: Presentation and Discussion
  • 12:30 pm to 02:00 pm: Lunch
  • 02:00 pm to 04:00 pm: Problem Sets
  • 04:00 pm to 05:00 pm: Discussion of Problem Sets
  • 08:00 pm: Dinner

Day 2: Responses to Insider Trading Regulations

Pre-Reading

Steven Huddart, John S. Hughes, and Carolyn B. Levine, Public Disclosure and Dissimulation of Insider Trades, Econometrica, Volume 69, Number 3, 665-681, May 2001.

Alan D. Jagolinzer, SEC Rule 10b5-1 and Insiders' Strategic Trade, Management Science, Volume 55, Number 2, 224-239, February 2009.

Zahn Bozanic, Mark Dirsmith, and Steven Huddart, The Social Constitution of Regulations: The Endogenization of Insider Trading Laws, Accounting, Organizations & Society, Forthcoming.

  • 09:00 am to 12:30 pm: Presentation and Discussion
  • 12:30 pm to 02:00 pm: Lunch
  • 02:00 pm to 04:00 pm: Problem Sets
  • 04:00 pm to 05:00 pm: Discussion of Problem Sets
  • 08:00 pm: Dinner

Day 3: Stock Options

Pre-Reading

Steven Huddart, Employee stock options, Journal of Accounting & Economics, Volume 18, Number 2, 207-231, September 1994.

Chip Heath, Steven Huddart, and Mark Lang, Psychological factors and stock option exercise, Quarterly Journal of Economics, Volume 114, Number 2, 601-627, May 1999.

Steven Huddart, Mark Lang, and Michelle Yetman, Volume and Price Patterns Around a Stock's 52-Week Highs and Lows: Theory and Evidence, Management Science, Volume 55, Number 1, 16-31, January 2009.

  • 09:00 am to 12:30 pm: Discussion and Presentation
  • 12:30 pm to 02:00 pm: Lunch
  • 02:00 pm to 04:00 pm: Problem Sets
  • 04:00 pm to 05:00 pm: Discussion of Problem Sets
  • 08:00 pm: Dinner