The paper tries to establish for a large European car dealership whether target ratcheting and target achievements are associated with the type of contract offered to the franchisee in the dealership. We find that the franchisor sets different targets within a common stair-step incentive scheme...

Firms often include summaries with earnings releases. However, manager-generated summaries may be prone to strategic tone and content management compared to the disclosures they summarize. In contrast, computer algorithms can summarize large amounts of text without human intervention, and may...

Many firms use forced rating systems in which supervisors must evaluate employees according to a predefined distribution. We develop new theory suggesting that forced ratings are less likely to enhance performance when supervisors assess subjective dimensions of employee performance (e.g.,...

In this study, we investigate self-deception among managers in a position to make a biased promotion recommendation. In a tournament, managers promote their weaker employees instead of their best in order to compete against them at later stages. However, we find that when their promotion...

Although employees' time estimates are used extensively for costing purposes, they are prone to measurement error. In an experimental setting, we research how measurement error in time estimates varies with: (1) the level of aggregation in the definition of costing system activities (aggregated...

Most studies on cost-based decision-making examine the profit impact of cost reports that rely on different methods to allocate costs. In practice, firms' cost reports often employ the same cost allocation method with subtle variations in the way that the cost data are presented. This paper...