This study investigates the effect of a principal's choice on the availability of discretionary controls, where discretionary controls are defined as those not supported by enforceable explicit contracts. In contrast to prior findings on explicit controls, we find that agent reciprocity is not...

We draw on theory from moral licensing and image motivation to test the prediction that, when auditors provide assurance over a pro-social activity that is roughly analogous to reported corporate social responsibility (CSR), reporters become more aggressive in subsequent reporter-auditor...

Budgets serve an important role in motivating employee performance. We examine how the difficulty of meeting a budget target (“budget difficulty”) and the stability of the budget environment affect performance. We use a controlled experiment where employee-participants perform a task under...

We examine the effect of endogenous contract selection on budgetary slack using two slack-inducing contracts found in the literature: a trust contract where the superior must accept the subordinate’s budget and a discretion contract where the superior can accept or reject the budget. Because...

We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding is likely to occur when there are only between-team incentives, and offering within-team incentives may solve this problem....

The modern business environment is a dynamic one, and organizations must be adaptive. In addition, organizations rely increasingly upon groups. This study provides an examination of the effectiveness of controls in dynamic, cooperative environments. As control, we study a mechanism that provides...

We examine how decision makers adjust their allocation decisions in risky environments, and how organizational context influences these decisions. Superiors often have discretion over bonus allocations, allowing them to make adjustments for the risk faced by agents. It is thus important to...

In this study, we experimentally investigate how performance risk and relational risk affect a principal's willingness to offer gift, bonus, or penalty contracts and the subsequent motivational effect that these three contracts have on agents. Prior literature has not directly compared...

We examine theoretically and experimentally how combining between-team and within-team incentives affects behavior in team tournaments. Theory predicts that free-riding is likely to occur when there are only between-team incentives, and offering within-team incentives may solve this problem....

This study investigates the effect of internal reporting environment openness and organizational identification on managers’ budgetary misreporting. Using an experiment, we find that organizational identification moderates the effect of internal reporting environments on misreporting. That is,...