Delegated Bidding and the Allocative Effects of Alternative Accounting Rules

Ivan Marinovic
Additional contact information
Ivan Marinovic: Stanford University

Research Papers from Stanford University, Graduate School of Business

Abstract: I study the efficiency of three prominent accounting rules in a delegated bidding setting where bidders' incentives are tied to both accounting income and economic surplus. Trade efficiency is maximized (minimized) by the value-in-use method (historical cost method). The exit-value method generates an accounting based winner's curse that results in fire-sale-like valuations. Yet, in the limit, as the number of bidders grows large, the efficiency of the exit-value method converges to that of the value-in-use method.

Date: 2014-10
New Economics Papers: this item is included in nep-acc and nep-mfd
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.gsb.stanford.edu/faculty-research/worki ... ive-accounting-rules

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3251

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().