Areas of Expertise (3)
Brian White is an Assistant Professor in the Department of Accounting. He teaches Financial Statement Analysis in the MBA, MPA and BBA programs. White's research focuses on judgment and decision-making in financial and managerial accounting. His recent work uses psychological theories and MRI evidence to explain why human beings don’t always make the rational decisions that classical economics expects of them. Prior to pursuing an academic career, Brian spent ten years as co-owner and finance director for a privately-held chain of retail stores based in Liverpool, England.
University of Illinois Urbana-Champaign: PhD, Accountancy 2012
Manchester Business School, University of Manchester: MBA, Business Administration 2002
Centre of African Studies, University of Edinburgh: Master of Science, African Studies 1997
Edmund A. Walsh School of Foreign Service, Georgetown University: Bachelor of Science, Foreign Service 1995
Market participants who evaluate risk often have a preference or goal for positive company performance. The authors test how such a directional goal affects risk perceptions and the relation between risk perceptions and assessments of value in an investment context.
In this functional magnetic resonance imaging (fMRI) study, we evaluated how fixed wage (FW) incentives and performance-based (PB) financial incentives, in which pay is proportional to outcome, differentially regulate positive and negative emotional reactions to hypothetical colleagues that conflicted with the economics of available alternatives.
In our two-part study, we looked at managers’ investment decisions when their emotional reactions conflicted with the economics of their choices—that is, when the best choice from the company’s perspective is to select an investment that goes against a manager’s emotions. The goal was to learn about the costs to companies when managers automatically rely on their emotional reactions when making decisions and to learn whether compensating managers based on the outcome of their choices—through performance-based incentives—could reduce these costs.
The provision of examples as implementation guidance is pervasive in accounting standards. Prior research has established that preparers engage in “example‐based reasoning,” a tendency to favor the accounting treatment in an example, even when the example does not exactly match the transaction at hand. In this paper, we investigate whether fact‐weighting guidance counteracts this tendency.
In this paper, we experimentally test whether the features of hybrid instruments affect the credit‐related judgments of experienced finance professionals, even when the hybrid instruments are already classified as liabilities or equity.
An enduring issue in financial reporting is whether and how salient summary measures of firm performance ('earnings metrics') affect market price efficiency. In laboratory markets, we test the effects of salient earnings metrics, which vary in how they combine persistent and transitory elements, on investor information search, beliefs about value, offers to trade, and market price efficiency. We find that including transitory elements in salient earnings metrics causes traders to search unnecessarily for further information about these elements and to overestimate their effect on fundamental value relative to a rational benchmark.
As part of its push for more plain English in disclosures, the SEC argues that firms should use more concrete language to make abstract concepts clearer to investors.
While economic theory prescribes performance-based incentives to align goals and induce effort, psychology theory suggests that the salience of emotions is difficult to overcome without also inducing more deliberate consideration of both emotional and economic factors (“System 2 processing”). We link these perspectives by investigating whether performance-based incentives mitigate the costly influence of emotion by inducing more System 2 processing.
We provide theory and experimental evidence consistent with an unintended, causal relation between Corporate Social Responsibility (CSR) performance and investors' estimates of fundamental value that can be attenuated by investors' explicit assessment of CSR performance.