This study investigates whether the effect of managerial discretion over team members' compensation on team performance depends on task interdependence. Task interdependence reflects the degree to which the increase in team performance resulting from a team member's effort depends on the efforts...

Prior research suggests that providing managers with discretion over team bonus allocation can improve team performance because it enhances the relation between team members’ contributions to team output and their rewards. This study investigates whether task interdependence influences...

Employee contracts often allow for managerial discretion, such that the manager decides after observing an employee's performance how that employee will be rewarded or penalized. Importantly, the effects of such evaluation outcomes can extend beyond the employee(s) directly affected, because...

We investigate whether the effect of relative performance information on tournament performance depends on the tournament's prize structure. We focus on the effect of relative performance information on two tournament prize structures: a two-tier structure in which only the top performer...

Participative budgeting processes are an important element of management control systems in many firms. The literature on participative budgeting has studied the role of information asymmetry. However, prior contributions do not differentiate between superior uncertainty about future...

In an experiment, we model two stylized facts about capital budgeting practice, budgetary slack creation and delegation of decision-making authority. In our setting, under centralization, headquarters announces a budget, the division manager gives a cost report, and headquarters decides on the...