Theory & Prediction Development (car-theory-development)

When to trigger

• Predictions are descriptive ("X is associated with Y") with no mechanism
• An analytical paper has equations but no clear economic intuition
• An experiment lacks a theory that pins down the predicted direction and the process
• A reviewer says "this is atheoretical" or "the predictions don't follow from the framework"

CAR develops theory differently by tradition

Because CAR is method-agnostic, "theory development" means different things across its traditions, and a reader should never be able to swap in a generic management-theory template:

• Archival / capital-markets. Ground predictions in economics-based frameworks (information asymmetry and disclosure, agency and contracting, market efficiency and the properties of accounting numbers). Derive directional, falsifiable predictions and, critically, predict cross-sectional variation — the moderators that make the effect stronger or weaker are where the theoretical content lives. State the maintained assumptions linking the accounting construct to the market outcome.
• Experimental. Specify the psychological/economic process (e.g., motivated reasoning, mental accounting, ambiguity, incentives) that produces the effect, then design predictions that isolate that process — including a predicted mediator and the conditions under which the effect reverses or vanishes. Theory must justify the manipulation, not just the dependent variable.
• Analytical / modeling. The model is the theory. State the setting, players, information structure, timing, and equilibrium concept; derive results as propositions with proofs; and translate each comparative static into an empirical or institutional implication. The contribution is the economic insight, not the algebra.
• Field / qualitative. Build theory inductively from the data; make the abductive logic from observations to constructs explicit and traceable.

Predictions and hypotheses

• Write each prediction so the data could falsify it; state sign and, where possible, relative magnitude.
• For mediation/process claims, theorize the mechanism before testing it.
• Distinguish the maintained assumptions (untested) from the tested predictions.

Checklist

• [ ] The mechanism is named and its logic is explicit, not assumed
• [ ] Predictions are directional and falsifiable; cross-sectional/conditional predictions stated
• [ ] (Analytical) assumptions, equilibrium concept, and the intuition behind each result are stated
• [ ] (Experimental) the predicted process/mediator and reversal conditions are specified
• [ ] Predictions map cleanly to constructs the chosen method can measure or manipulate

Anti-patterns

• Association dressed as theory: "we expect X relates to Y" with no why.
• Algebra without intuition (analytical) or DV-only theory (experimental) that ignores the process.
• Borrowed-template theory that ignores accounting's information/contracting context.

Operating pass for Contemporary Accounting Research

Use this as a second-pass capability check. First lock the accounting construct, setting, identification or theory, and disclosure/market/organizational implication; then test whether the manuscript addresses accounting reviewers who expect accounting-specific constructs, credible design, and contribution to reporting, auditing, tax, or governance debates.

• Primary move: Return a claim-evidence-risk ledger; every recommendation must point to a manuscript location or missing artifact.
• Decision ledger: return claim / evidence / blocker / next edit rows so the next pass can patch the manuscript directly.
• Neighbor test: compare against The Accounting Review for US flagship breadth, JAR for Chicago-style accounting research, JAE for economics/accounting interface; if the neighboring outlet has the stronger audience claim, recommend re-routing before polishing.
• Verification floor: before submission-ready advice, re-open resources/official-source-map.md for volatile rules and name the one unresolved fact that could change the recommendation.

Output format

【Tradition】archival / experimental / analytical / qualitative
【Mechanism】the economic/behavioral logic ...
【Predictions/Hypotheses】H1..Hn, signs, conditional/cross-sectional ...
【Assumptions】maintained vs. tested (or model primitives) ...
【Process】predicted mediator / equilibrium intuition ...
【Next step】car-literature-positioning or car-methods