Ambiguity, Learning, and the Diffusion of Reporting Practices

Hombach and Sellhorn explore how decision makers cope with ambiguity about optimal reporting policy. They document the learning processes through which decision makers, such as managers, form expectations about the net payoffs of alternative reporting practices. The project combines in-depth institutional knowledge about diverse reporting settings with existing theories of social learning. Methodologically, it draws on a broad set of methods including qualitative, simulation, and empirical-archival approaches. The findings of the project will help explain how decision makers learn about the transparency effects of alternative reporting practices, and how this process affects the diffusion of these practices across firms and over time.

  • Forschungsfrage

    How do firms make transparency-inducing reporting decisions under ambiguity, and what strategies do firms use to learn about the net payoffs of alternative reporting practices?

  • Motivation zur Forschung

    Prior research in accounting commonly assumes that firms have rational expectations about reporting payoffs and that firms focus on strategic aspects of reporting decisions. Yet, in many situations, it appears unlikely that firms are readily endowed with this information. In particular, a firm often faces changes in regulation, its business environment, and stakeholders’ information needs. In these situations, the firm may consider several reporting payoff distributions possible, and lack an informative prior about them. Hence, the firm makes its reporting decision under ambiguity.

  • Forschungsprogramm

    Our project seeks to provide comprehensive evidence on the existence, determinants, and consequences of ambiguity in firms’ reporting decisions. We will employ interview and survey methods to elicit the causal mechanism linking firms’ reporting ambiguity and their chosen reporting practices. Further, we will derive theoretical predictions how reporting practices diffuse across firms and over time when firms’ face ambiguity in their reporting decision. Finally, we will empirically test these predictions by conducting large-scale empirical tests in different settings. In particular, these settings include shifts in firms’ reporting following regulatory changes and voluntary reporting innovations.

  • Research Contribution

    Our results will help inform firms and regulators about ways of reducing ambiguity in firms’ reporting decisions and fostering best practices.

Verwandter Inhalt


Beteiligte Institutionen

Die Hauptstandorte vom TRR 266 sind die Universität Paderborn (Sprecherhochschule), die HU Berlin und die Universität Mannheim. Alle drei Standorte sind seit vielen Jahren Zentren für Rechnungswesen- und Steuerforschung. Hinzu kommen Wissenschaftler der LMU München, der Frankfurt School of Finance and Management, der WHU – Otto Beisheim School of Management, der ESMT Berlin und der Goethe-Universität Frankfurt, die die gleiche Forschungsagenda verfolgen.