About

Ravi Bapna is the Curtis L. Carlson Chair Professor in Business Analytics and Information Systems and serves as the Academic Director of the Carlson Analytics Lab. He is closely affiliated with the Carlson School's MS in Business Analytics program and the Carlson Analytics Lab, where graduate students study a broad range of data analysis techniques and apply them to real business problems. These students are skilled in exploratory data visualization, predictive analytics techniques, programming, data engineering, machine learning methods, and more, emerging as data science professionals. Partner organizations have the opportunity to work with these talented students while supporting the educational mission of the programs. Faculty scholars from across the Carlson School and beyond bring expertise in areas such as computer science, econometrics, strategy, and causal experimentation to the Analytics for Good Institute, contributing to its mission of impactful engagement and research.

Research topics

• Business
• Accounting
• Economics
• Microeconomics
• Actuarial science

Selected publications

• The Complementarities of Accounting Information and Its Off-equilibrium Role

  SSRN Electronic Journal · 2018-01-01

  articleOpen accessSenior author
  PublisherDOI

• Imperfect competition in audit markets and its effect on the demand for audit-related services

  Accounting review: A quarterly journal of the American Accounting Association · 2016-01-01 · 56 citations

  article1st authorCorresponding

  We demonstrate that when cost differences among CPA firms serve as a source of economic rents to the incumbent auditor, the switching costs previously cited asthe sourceof the auditors' rents may actually reducethe auditors' economic rents to the benefit of the client. This result has implications for how switching costs affect the way audit engagements are structured and how clients invest in their relationships with auditors. While the resulting behavior may appear to be inefficient or of a suspicious nature, it is a natural consequence of imperfect competition. This behavior includes (i) clients under-investing in their accounting systems, (ii) clients accepting their current auditor's management advisory services (MAS) bid, even though a rival CPA firm has submitted a lower bid for identical MAS, and (iii) inefficient same sourcing for MAS and audit services when CPA firms treat their audit and non-audit divisions as separate profit centers.

  Publisher

• How Frequent Financial Reporting Can Cause Managerial Short‐Termism: An Analysis of the Costs and Benefits of Increasing Reporting Frequency

  Journal of Accounting Research · 2014-01-30 · 237 citations

  article1st authorCorresponding

  ABSTRACT We develop a cost–benefit tradeoff that provides new insights into the frequency with which firms should be required to report the results of their operations to the capital market. The benefit to increasing the frequency of financial reporting is that it causes market prices to better deter investments in negative net present value projects. The cost of increased frequency is that it increases the probability of inducing managerial short‐termism. We analyze the tradeoff between these costs and benefits and develop conditions under which greater reporting frequency is desirable and conditions under which it is not.

  PublisherDOI

• How Frequent Financial Reporting Causes Managerial Short-Termism: An Analysis of the Costs and Benefits of Reporting Frequency

  SSRN Electronic Journal · 2012-01-01 · 26 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

• Accounting Conservatism and the Efficiency of Debt Contracts

  Journal of Accounting Research · 2009-02-13 · 398 citations

  article1st authorCorresponding

  ABSTRACT In this paper we examine how accounting conservatism affects the efficiency of debt contracting. We develop the statistical and informational properties of accounting reports under varying degrees of conditional and unconditional accounting conservatism, consistent with Basu's [1997] description of differential verifiability standards. Optimal debt covenants and interest rates on debt are derived from a natural tension between debt holders and equity claimants. We show how optimal covenants vary with the degree of conservatism and derive an efficiency metric that depends on the degree of conservatism. We find that accounting conservatism actually decreases the efficiency of debt contracts, contrary to the suggestions of Watts [2003] and contrary to the hypothesis in numerous empirical studies.

  PublisherDOI

• Accounting Conservatism and the Efficiency of Debt Contracts

  SSRN Electronic Journal · 2008-01-01 · 139 citations

  articleOpen access1st authorCorresponding
  PublisherDOI

• On the welfare effects of allowing unlimited renegotiation in agency relationships

  Economic Theory · 2007-11-05 · 4 citations

  article1st authorCorresponding
  PublisherDOI

• Assessing the Information Content of Mark‐to‐Market Accounting with Mixed Attributes: The Case of Cash Flow Hedges

  Journal of Accounting Research · 2007-02-23 · 55 citations

  article1st authorCorresponding

  ABSTRACT We examine how outsiders rationally interpret a reported loss on derivatives when the application of mark‐to‐market accounting to cash flow hedges creates a mixed attribute problem. We find that because of the mixed attribute problem, the information content of mark‐to‐market accounting is related to the information content of historical cost accounting in a very specific way. This relationship allows us to identify the circumstances under which mark‐to‐market accounting facilitates and when it detracts from the objective of providing an early warning of potential financial distress. We show that the reporting of an impending derivative loss by a distressed firm can actually lead outsiders to infer that the firm is in a better financial position than what they would have inferred under the silence associated with historical cost accounting. Without the mixed attribute problem, mark‐to‐market accounting would always yield more accurate assessments of the firm's financial position.

  PublisherDOI

• On the Value of Transparency in Agencies with Renegotiation

  Journal of Accounting Research · 2004-11-04 · 33 citations

  article1st authorCorresponding

  ABSTRACT In this paper we study when it is advantageous to improve corporate transparency by allowing shareholders direct access to corporate information and when it is preferable to rely on a reporting system in which shareholders only gain access to information that management chooses to disclose. We show that in an agency model that allows for contract renegotiation, the desirability of a fully transparent reporting regime hinges on the stewardship properties of the information in question. Specifically, information that is mainly useful for predicting future events and of little use for evaluating past actions should only be made available to the public through management's self‐interested disclosures. Only if the information is useful for making inference about managerial actions can it be optimal to have full corporate transparency, so that outsiders have independent access to the same information as management.

  PublisherDOI

• The Effect of Earnings Forecasts on Earnings Management

  Journal of Accounting Research · 2002-06-01 · 167 citations

  articleSenior author

  We develop a theory of the association between earnings management and voluntary management forecasts in an agency setting. Earnings management is modeled as a “window dressing” action that can increase the firm’s reported accounting earnings but has no impact on the firm’s real cash flows. Earnings forecasts are modeled as the manager’s communication of the firm’s future cash flows. We show that it is easier to prevent the manager from managing earnings if he is asked to forecast earnings. We also show that earnings management is more likely to follow high earnings forecasts than low earnings forecasts. Finally, our analysis shows that shareholders may not find it optimal to prohibit earnings management. Earlier results rationalize earnings management by violating some assumption underlying the Revelation Principle. By contrast, in our model the principal can make full commitments and communication is unrestricted. Nonetheless, earnings management can be beneficial as it reduces the cost of eliciting truthful forecasts.

  PublisherDOI

Frequent coauthors

• Raghu Venugopalan

  University of Illinois Urbana-Champaign

  7 shared

• Thomas Hemmer

  Rice University

  7 shared

• Chandra Kanodia

  University of Minnesota System

  5 shared

• Haresh Sapra

  University of Chicago

  4 shared

• John S. Hughes

  Virginia Tech

  2 shared

• Chao Tang

  Second Affiliated Hospital of Soochow University

  2 shared

• Gerald A. Feltham

  1 shared

• Raffi Indjejikian

  University of Michigan–Ann Arbor

  1 shared