Foundations and Trends® in Accounting > Vol 3 > Issue 1

Experimental Research in Financial Reporting: From the Laboratory to the Virtual World

Robert Bloomfield, Nicholas H. Noyes Professor of Management and Professor of Accounting, Cornell University, Johnson Graduate School of Management, USA, rjb9@cornell.edu Kristina Rennekamp, Graduate Student in Accounting, Cornell University, Johnson Graduate School of Management, USA, kmr52@cornell.edu
 
Suggested Citation
Robert Bloomfield and Kristina Rennekamp (2009), "Experimental Research in Financial Reporting: From the Laboratory to the Virtual World", Foundations and TrendsĀ® in Accounting: Vol. 3: No. 1, pp 1-85. http://dx.doi.org/10.1561/1400000012

Published: 31 Mar 2009
© 2009 R. Bloomfield and K. Rennekamp
 
Subjects
Financial reporting
 
Keywords
Financial reportingExperimental methodsAccountingFinanceExperimental economics
 

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In this article:
1. Introduction
2. The Uses and Limits of the Laboratory
3. What Are Virtual Worlds?
4. Virtual World Economies
5. A Taxonomy of Experimental Methods in Virtual Worlds
6. Implementing Complex Institutions in Virtual Worlds
7. Addressing the Challenges of Embedded Experiments in Virtual Worlds
8. Cost-Benefit Analysis
9. Concluding Remarks
References

Abstract

Virtual worlds can allow experimental researchers to create and examine settings with far more institutional complexity than is possible in a traditional laboratory setting. This document discusses how studies with greater complexity can complement more traditional experimental methods for those who are studying financial reporting; explores both the opportunities and challenges virtual worlds present to experimentalists; presents some examples of how to implement complex institutions; and discusses how the costs and benefits of the virtual-world laboratory vary across different experimental traditions.

DOI:10.1561/1400000012
ISBN: 978-1-60198-214-8
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ISBN: 978-1-60198-215-5
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Table of contents:
1. Introduction
2. The Uses and Limits of the Laboratory
3. What are Virtual Worlds?
4. Virtual World Economies
5. A Taxonomy of Experimental Methods in Virtual Worlds
6. Implementing Complex institutions in Virtual Worlds
7. Addressing the Challenges of Embedded Experiments in Virtual Worlds
8. Cost-Benefit Analysis.
9. Concluding Remarks.
References

Experimental Research in Financial Reporting

Experimental Research in Financial Reporting examines the use of virtual worlds as next-generation laboratories that can help experimental researchers implement features of complex institutions that are not feasible in traditional laboratory settings. This new technology, originally developed for online computer games, lends itself very well to complex economic settings with large numbers of agents interacting through complex institutions for long periods of time. These virtual worlds provide the opportunity to construct settings whose complexity approaches those that accounting researchers wish to study. Since the settings are virtual, researchers can use experimental methods to control and manipulate institutional features (like accounting regulations) and environmental features (such as industry forces) to allow clear causal inferences with limited reliance on econometrics.

 
ACC-012