Answer the following related to behavioral research: a. What is the main concern of behavioral research? b. How does behavioral research differ from the decision-model approach? c. What are some of the findings of this research?
What will be an ideal response?
ANSWER:
a. The main concern of behavioral research is how users of accounting information make decisions and what information they need.
b. This approach is descriptive, whereas the decision-model approach is normative. Also, much of behavioral research uses laboratory subjects in carefully controlled experimental situations.
c. Many behavioral studies have shown discrepancies between normative decision models and the actual decision processes of users. Also, revision of probabilities by decision-makers occurs less than Bayesian decision models indicate is appropriate. Other research has found that there may be a tendency to use published financial statements for managerial decision-making purposes.
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