We experimentally examine how employees' employment horizons (long or short) and the performance measures in their incentive contracts (forward-looking or contemporaneous) affect employee effort allocation and performance. Consistent with economic theory, we find that the decision-influencing...

This study investigates experimentally how mutual monitoring affects effort when employees are compensated via rank-order tournaments. Theory and anecdotal evidence suggest that mutual monitoring may either decrease effort by facilitating collusion or increase effort by stimulating competition....

Research suggests that employees work harder under penalty contracts than under economically equivalent bonus contracts. We build on this literature by examining how the motivational advantage of penalty contracts depends on a common aspect of real-world contracts: payoff ambiguity. With payoff...

Accounting involves assigning numbers to events - quantifying them. Conventional wisdom holds that putting numbers to an argument enhances its persuasive power. However, little scholarly evidence exists to support or refute this claim, in accounting or elsewhere. In this paper, we develop an...

Accounting involves assigning numbers to events - quantifying them. Conventional wisdom holds that putting numbers to an argument enhances its persuasive power. However, little scholarly evidence exists to support or refute this claim, in accounting or elsewhere. In this paper, we develop an...

We replicate an influential study of monetary incentive effects by Jamal and Sunder (1991) to illustrate the difficulties of drawing causal inferences from a treatment manipulation when other features of the experimental design vary simultaneously. We first show that the Jamal and Sunder (1991)...

Leading by example is one of the most powerful methods to encourage individuals to work toward a common objective. Despite the importance of leadership, little is known about how the effectiveness of leading by example depends on institutional features, such as the transparency and design of...

This study examines the behavioral impact of an information system, and how that impact varies with the information system's precision, in an internal reporting environment. In order to examine behavioral effects, we do not permit the owner to contract on the system's output. We propose that a...

This study investigates whether increasing a superior's span of control reduces the effectiveness of capital budgeting in eliciting truthful reports. We conduct an experiment based on a modification of the capital budgeting setting described by Antle and Eppen (1985). This modification...

This paper investigates managerial discretion in compensation decisions in a team (i.e., joint production) setting. Specifically, we investigate the conditions under which managers tasked with allocating a discretionary bonus pool are willing to incur a personal cost to obtain ex post...