We examine the effect of endogenous contract selection on budgetary slack using two slack-inducing contracts found in the literature: a trust contract where the superior must accept the subordinate’s budget and a discretion contract where the superior can accept or reject the budget. Because...

We use an experiment to investigate the efficacy of a non-binding budgetary announcement made by an owner in order to mitigate a management control problem induced by asymmetric information. The owner's announcement indicates how much funding she will provide for each possible cost report by the...

This study examines optimal task assignment and performance measurement under moral hazard in a two state setting where two agents are risk neutral and have limited liability. Both productive and incentive efficiency are affected by task assignment. The principal may assign to each agent either...

An experiment with three treatments is used to evaluate the social efficiency of budgeting protocols induced by other-regarding preferences. In disaggregated superiors receive three individual proposals in iterated fashion, and must decide whether to accept each project without knowledge of the...

We conduct an experiment designed to investigate unobservable commitment in a management control setting with a privately informed subordinate. The experimental setting follows closely that found in Evans, Hannan, Krishan and Moser [2001] and Rankin, Schwartz and Young [2003]. In one treatment...

By its very nature, management control research can be complex and difficult to understand, and hence challenging to introduce into the classroom. Nevertheless, it is important for accounting instruction to retain a connection between teaching and research. This note provides guidance on how...