This study provides experimental evidence on the effects of breach of subordinates’ psychological contracts on honesty of communications under participative budgeting. While participative budgeting can improve economic outcomes, it can also establish psychological contracts whereby...

Contract design involves control mechanisms that trade off the provision of ex ante incentives to reduce losses from moral hazard, while avoiding costs of ex post adaptations. We examine how this tradeoff influences the form of the contract, namely cost-plus and fixed-price. We investigate...

This paper examines how nonprofit organizations respond to incentives to manage their publicly available financial information. Prior research identifies two operating ratios donors commonly use to evaluate the efficiency and effectiveness of nonprofits (i.e., the program service ratio, defined...

This study examines whether hospitals without physician participation on their boards of directors deliver lower quality of care. Using data from California nonprofit hospitals from 2004 to 2008, we document that the absence of physicians on the board is associated with a decrease of 3-5...

This study examines whether introduction of fixed-price regulation influences firms to increase the elasticity of their cost structures and to reduce the asymmetric behavior of cost in response to changes in volume. It also examines variations in the extent of such responses arising from...