When setting budgets, managers may place constraints on how resources can be used in an effort to mitigate opportunistic behavior by subordinates. These restrictions can affect the ability of the subordinate to succeed in the budgeted task, but may also have an unintended spillover effect on the...

Using a series of laboratory markets, this paper provides evidence that a willingness to engage in speculative trade is largely driven by a failure of traders to account for information about value implicit in other traders' actions and that this behavior arises because traders construct myopic...