Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm.

Robert H. Ashton; Thomas J. Burns

doi:10.2308/tar-4511820

January 1, 1980The Accounting Review

Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm.

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Key Points

The research aims to explore how functional fixation affects decision-making in firm valuation.
Reviewed the book on earnings versus cash flows.
Conducted experimental analysis on firm valuation methods.
Explored cognitive biases in valuation processes.
Findings suggest cognitive biases influence valuation decisions.
Participants displayed a preference for either earnings or cash flows based on fixation.
The study uncovers implications for decision-making in financial contexts.

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Implication

Experiment reveals insights on firm valuation by comparing earnings and cash flows, indicating cognitive biases.

Abstract

The article reviews the book "Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm," by A. Rashad Abdel-Khalik and Thomas F. Keller.

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Cite This Study

Ashton et al. (1980) studied this question.

synapsesocial.com/papers/69ba43b64e9516ffd37a533a https://doi.org/10.2308/tar-4511820

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Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm.

Key Points

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Implication

Abstract

Discussion

Cite This Study

Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm.

Key Points

Ask about this paper

Implication

Abstract

Discussion

Cite This Study

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