Analysis and Comparison of the Lens and Bayesian Information Processing Paradigms

Two basic paradigms have been used by accounting researchers to model and evaluate financial judgments; the Brunswick Lens and Bayesian paradigms. In this paper we analyze and compare the Lens Bayesian paradigms in terms of the typical questions addressed, the assumptions and technical properties of the models, descriptive statistics generated and environmental comparisons typically made. Several previously neglected aspects of the paradigms will be discussed. Methodological guidance will be provided for individuals who wish to become either consumers or producers of the human information processing literature. The analysis leads to the suggestion that the Bayesian setting is a more complete and descriptive yet more complex and costly paradigm for studying information processing.