Accounting for decisions and decisions for accounting

Article Abstract:

The behavioral decision theory (BDT) is discussed. A brief history of BDT is presented. The eight major concepts dealing with BDT are also analyzed. These are that judgement can be modeled; bounded rationality; to understand decision making, understanding tasks is more essential than understanding people; levelsof apiration/reference points; use of heuristic rules; the importance of adding; search for confirmation, and thought as construction. A comparison of BDT and problem solving/cognitive science is also presented. It is shown that there exists a relationship between decision making and problem solving. Both activities indicate that formally identical decisions or problems are represented in various ways and that solutions are affected by forms of presentation. The main difference between the two is attributed to the sociology of science rather than interest in different phenomena.

Decision theory

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An integrative framework for theory construction and testing

Article Abstract:

Multiple indicator, latent variables models provide accounting researchers with a single, integrating framework for estimating structural relationships among abstract concepts and judging the adequacy of their measurement. They also address concerns about the ambiguities and inconsistent findings often encountered when constructing and testing accounting and other financial theories.

Methods, Analysis, Methodology, Research methods, Financial research

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