Faculty & Research

Pingyang Gao

Associate Professor of Accounting

Phone :
773 702-4971
Address :
5807 South Woodlawn Avenue
Chicago, IL 60637

Pingyang Gao studies disclosure regulation, accounting standards setting, incentive and contracting, and equity valuation. He has taught MBA- and PhD-level courses at Yale University and lectured in the China Professional Manager Qualification Program.

Gao's paper, "Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency," which won the Best Paper Award of 2007 AAA Northeast Regional Meeting, is published in Journal of Accounting Research. Another paper, "Disclosure Quality, Cost of Capital, and Investors' Welfare," published in The Accounting Review, was the recipient of 2008 American Accounting Association Competitive Manuscript Award. Gao's publications also include two books in Chinese, Financial Statement Analysis for Non-Accountants and Practical Accounting English. In addition, he has received several honors, including the Edward Alexander Bouchet Graduate Honor Society membership and the Deloitte & Touche Foundation Doctoral Fellowship.

"Having witnessed and experienced the market-oriented reform in China in the past three decades, I believe that better understanding of market behaviors and public policies could profoundly improve many people's welfare. I hope my research could contribute to our deeper appreciation of market mechanism and public policies."

Gao has presented his research at various conferences and university workshops. He is a member of the AAA, AFA, AEA, and CAPANA. He is also an inactive CPA in China.

Gao earned a bachelor's degree in accounting in 2002 from Renmin University of China, a master's degree in finance in 2004 from Peking University, and a PhD in accounting in 2008 from Yale University. Gao joined the Chicago Booth faculty in 2008.

His hobbies and interests include reading, running, and Chinese bridge.

 

2013 - 2014 Course Schedule

Number Name Quarter
30000 Financial Accounting 2014 (Spring)

2014 - 2015 Course Schedule

Number Name Quarter
30000 Financial Accounting 2015 (Spring)

Other Interests

Reading, running, Chinese bridge.

 

Research Activities

Disclosure regulation; accounting standards setting; incentive and contracting; equity valuation.

"Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency," Journal of Accounting Research (2008).

"Disclosure Quality, Cost of Capital, and Investors' Welfare" The Accounting Review (2010)

For a listing of research publications please visit ’s university library listing page.

REVISION: A Measurement Approach to Binary Classifications and Thresholds
Date Posted: Nov  28, 2012
Classifications and thresholds are common in accounting rules. This paper explains one benefit of a binary classification and studies the properties of an optimal threshold in a model with managers’ opportunistic influence on raw evidence. A threshold that partitions raw evidence to a binary classification affects not only the ex post use of information by stakeholders but also the ex ante earnings management by managers. These dual functions differ qualitatively. As a result, the ex ante opti

REVISION: A Measurement Approach to Conservatism and Earnings Management
Date Posted: Oct  24, 2012
This paper develops a model of accounting measurement to study the design of the optimal measurement rule. The core of the model is a representation of accounting measurement process that features the manager’s opportunistic influence and the use of verification as a response. To safeguard against the manager’s ex post opportunism, the optimal measurement rule is conservative in the sense that it requires more verification of the transaction characteristics favorable to the manager. The mode

REVISION: Where Does the Information in Mark-to-Market Come From?
Date Posted: Sep  06, 2012
We study the ex-ante efficiency of mark-to-market accounting (MTM) in a loan market by taking into account its real effects on banks’ origination and retention decisions. Despite its benefit of improved valuation accuracy, MTM could reduce the overall efficiency of the economy. The efficiency loss results from the central idea of the paper: the attempt to exploit the information in market price, by adopting MTM, interferes with the market process that generates the information in price. Relati

REVISION: Informational Feedback Effect, Adverse Selection, and the Optimal Disclosure Policy
Date Posted: Feb  21, 2012
Trading in a secondary stock market not only redistributes wealth among investors but also generates information that guides subsequent investment. We provide a positive theory of disclosure that reflects both functions of a secondary market. By making private information public, disclosure reduces private information acquisition and levels the playing field. However, a leveled playing field has two opposite effects on firm value. On one hand, it ameliorates adverse selection among investors and

New: Economic Consequences of Idiosyncratic Information in Diversified Markets
Date Posted: Feb  21, 2012
While most accounting information is idiosyncratic in nature, economy-wide factors such as accounting standards affect the quality of idiosyncratic accounting information of many firms simultaneously. We study idiosyncratic and systematic features of accounting information by embedding a parsimonious, moral hazard problem into the framework of a multi-firm economy. Our model yields the insight that moral hazard distorts the sharing of idiosyncratic risk but does not affect the sharing of systema

REVISION: Disclosure Quality, Cost of Capital, and Investors' Welfare
Date Posted: Sep  10, 2009
One might expect that disclosure quality improves investor welfare by reducing cost of capital. This study shows that the argument is valid only in limited circumstances. Based on a production economy with perfect competition among investors, the analysis demonstrates three points. First, cost of capital could increase with disclosure quality when new investment is sufficiently elastic. Second, there are plausible conditions under which disclosure quality reduces the welfare of current and/or ne

New: Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency
Date Posted: Jan  07, 2008
This paper examines the market efficiency consequences of accounting disclosure in the context of stock markets as a Keynesian beauty contest, an influential metaphor originally proposed by Keynes (1936) and recently formalized by Allen, Morris, and Shin (2006). In such markets, public information plays an additional commonality role, biasing stock prices away from the consensus fundamental value toward public information. Despite this bias, I demonstrate that provisions of public information

REVISION: Keynesian Beauty Contest, Accounting Disclosure, and Market Efficiency
Date Posted: Sep  04, 2007
This paper examines the market efficiency consequences of accounting disclosure in the context of stock markets as a Keynesian beauty contest, an influential metaphor originally proposed by Keynes (1936) and recently formalized by Allen, Morris, and Shin (2006). In such markets, public information plays an additional coordination role, biasing stock prices away from the consensus fundamental value toward public information. Despite this bias, I demonstrate that provisions of public informatio


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