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Release: Dec. 10, 2002
Dodonova, Carroll win awards for finance, accounting research
Tippie College of Business faculty members were recently honored for their
research, receiving best-paper awards at two prestigious conferences.
Anna Dodonova, a visiting assistant professor of finance, received the Best
Ph.D. Paper Award at the Northern Finance Association's annual meeting Sept.
27-29 in Banff, Alberta. And Tom Carroll, a lecturer in the Tippie College
of Business, won the prize for the best paper at the 2002 Journal of Accounting,
Auditing, and Finance/KPMG Conference earlier this year.
The Northern Finance Association's annual meeting provided a forum where
finance academics, professionals and students from throughout North America
and the world heard and presented the latest research in finance. Dodonova
received $1,000 for the Best Ph.D. Paper Award, which was sponsored by Pearson
Dodonova authored the winning paper, "Applications of Regret Theory
to Asset Pricing," while at the University of Michigan. The paper presents
a theoretical model of asset pricing that analyzes how the behavior of stock
returns is affected by the presence of regret averse- investors on the market.
The model predicts that the market will overreact on good or bad news, resulting
in an excess volatility of stock returns. It also helps to analyze how an
improvement of stock market accessibility for non-professional traders affects
the predictability of stock returns.
Carroll's award-winning paper "The Reliability of Fair Value vs. Historical
Cost Information: Evidence from Closed-end Mutual funds," was co-authored
with Tom Linsmeier and Kathy Petroni of Michigan State University.
The research examines the value and relevance of fair value accounting,
which considers the market value of financial instruments as opposed to historical
cost accounting. Based on a sample of 143 closed-end mutual funds during 1982-1997,
Carroll and his colleagues found a significant association between stock prices
and the fair value of investment securities as well as between stock returns
and fair value securities gains and losses, even after controlling for historical
To examine whether differences in the perceived reliability of the investment
securities fair values affects investors' assessments of the usefulness of
the information, the researchers examined the association between stock metrics
and fair values across different fund types. Carroll and his co-authors found
that in all cases there is a significant association between the stock metrics
and fair values.
To view the paper, see http://www.stern.nyu.edu/ross/Linsmeier.pdf