In his latest research, “Disclosure Dynamics and Investor Learning,” Wharton accounting professor Frank Zhou examines the relationship between investor learning and earnings forecast decisions. He developed a structural model that illustrates the need for managers to understand where investor beliefs are when disclosing information. Zhou explained more to Knowledge at Wharton. An edited transcript of the conversation follows. Knowledge at Wharton: Could you give us a short summary of the paper and what question you were trying to answer? Frank Zhou: I look at how investor learning affects firms’ voluntary disclosure decisions. By voluntary disclosure decision, I mean management annual earnings forecast decisions. We know that management annual earnings forecasts are very prevalent, so it’s an important question to ask: What are the forces that shape management earnings forecast decisions?…