Accounting - Research Publications
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ItemThe Tone from Above: The Effect of Communicating a Supportive Regulatory Strategy on Reporting Quality(Wiley, 2018-05-01)ABSTRACT In collaboration with the Authority for the Financial Markets in the Netherlands, we manipulate the content of official letters that instruct financial intermediaries to submit a mandatory self‐assessment. As part of the Registered Report Process, we submitted our hypotheses, experimental procedure, and planned statistical analyses before data collection. We predicted that a request indicating a supportive regulatory attitude has a positive effect on reporting quality on average. We also predicted this effect to be stronger for small firms and for firms with a long‐term orientation, and to become negative for firms with a short‐term orientation. Planned analyses show that a supportive letter reduced reporting quality unless firms had a long‐term orientation, supporting the moderating influence of time horizon, but providing no support for the expected average effect or for moderation by firm size.
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ItemDynamic influences on cooperation in a social dilemma: How type of experience and communication affect behavioral spillovers.(Public Library of Science (PLoS), 2019-03-12)In many work and decision situations, realizing cooperation among individuals is important. However, decision making environments of individuals are far from stable, resulting in changes in task complexity and the social settings they encounter. We argue that past experiences with cooperative behavior can result in different cooperative norms and expectations about the behavior of others and will have an effect on an individual's subsequent behavior in new situations. This study experimentally investigates these dynamics of cooperative behavior in social dilemmas and addresses the role of communication to provide empirical evidence about a cognitive mechanism that may lead to these spillovers. Specifically, the experimental design randomly assigns subjects to one type of repetitive interactions in the first social dilemma (single partner or different partners) and we then examine how this impacts the propensity to behave cooperatively in subsequent social dilemmas with unfamiliar partners (either single or different). Because of the variety in complexity of decision-making environments in practice, we do so by examining behavioral spillovers across three different social dilemmas that vary in difficulty to make cooperation successful. Our findings show that individuals cooperate more during initial interactions with a single partner. More importantly, this has positive spillover effects for subsequent behavior and communication, even to settings without repeated interactions with a single partner. However, environmental conditions affect the ability to transfer established norms of cooperation to subsequent interactions, as an initially learned cooperative norm is gradually replaced by a more competitive attitude when individuals start to interact with unfamiliar others in a setting in which cooperative success is more difficult to achieve. Our findings illustrate the power of repeated interactions for establishing and sustaining cooperation in other settings and enhance understanding of how cooperative decisions can be shaped by both incentives and the broader behavioral context of individuals.
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ItemAn Empirical Examination of Goals and Performance-to-Goal Following the Introduction of an Incentive Bonus Plan with Participative Goal Setting(INFORMS, 2010-01)Prior research documents performance improvements following the implementation of pay-for-performance (PFP) bonus plans. However, bonus plans typically pay for performance relative to a goal, and the manager whose performance is to be evaluated often participates in setting the goal. In these settings, PFP affects managers' incentive to influence goal levels in addition to affecting performance effort. Prior field research is silent on the effect of PFP on goals, the focus of this paper. Using sales and sales goal data from 61 stores of a U.S. retail firm over 10 quarters, we find that the introduction of a performance-based bonus plan with participative goal setting is accompanied by lower goals that are more accurate predictors of subsequent sales performance. Statistical tests indicate that increased goal accuracy is attributable to managers “meeting but not beating” goals and to new information being impounded in goals. We further investigate how differences among managers are associated with goal levels. We find significant “manager effects” but no “supervisor effects.” In additional tests we find that cross-sectional differences among managers are related to differing marginal returns to slack-building effort. Turning to the role of new information on goals, we find that prior period performance has incremental power to explain goal levels in the postplan period. Our results provide field-based evidence that PFP and participative goal setting affect the level and accuracy of goals, effects that are associated with both information exchange and with managers' incentives to influence goals.