Despite the benefits of delegating decision rights, it is claimed that firms under delegate decision-making authority. However, to date, this claim is untested. This paper explores the choice between information elicitation and delegation. We also examine the effect of this choice on the...

In most organizations, budgets are important mechanisms for planning and control and for motivating subordinate performance. Accordingly, budgeting is one of the most extensively studied topics in managerial accounting. We analyze previous research by first classifying studies according to their...

We report experimental evidence regarding the effects of overconfidence and optimism on insurance decisions. The novel experimental design elicits risk perception information from participants prior to their participation in an incentivized risk management and insurance task. Our design...

Participative budgeting can benefita firm by incorporating subordinates’ private information into financing and operating decisions. In the managerial accounting literature, studies of participative budgeting posit superiors that range from passively committed to highly active participants,...

This study examines behavior in a budgeting setting where a superior has private information regarding the accuracy of the firm's cost system, which she may misrepresent in an effort to elicit more truthful budget proposals from subordinates. We explore two features of this budgeting setting....