We study the implications of introducing ethics into the traditional principal-agent model. In our model, the principal specifies a standard for effort at the time of contracting and the agent suffers a utility loss if he chooses not to provide the standard after agreeing to the contract. The...

We show that prices and incentives recommended by the salesforce literature when targeting a profitable segment can attract unprofitable customers, particularly when salespeople have high productivity and low risk (i.e., risk aversion times uncertainty). Therefore, when customers are...

Given traditional agency theory assumptions and unobservable effort in a single-period setting, a moral hazard arises in which the agent is expected to shirk and provide the miminal possible effort after contracting with the principal. Traditional solutions to this agency problem include paying...

Hannan, Rankin, and Towry (2006, HRT hereafter) propose that an information system is capable of affecting honesty in the manager's budget report by reducing information asymmetry between the manager and the owner regarding the level of honesty in the budget. They find that going from no...

We argue that recent participative budgeting experiments designed to extend agency theory reveal the effects of responsibility, transparency, and accountability. We define these three theoretical constructs and present two experiments designed to isolate their main and interactive effects. In...

We argue that participative budgeting experiments designed to test agency theory predictions reveal the effects of responsibility, transparency, and accountability. We define these accounting constructs and present two experiments designed to isolate their main and interactive effects. In...