Can process accountability mitigate myopic biases? : an experimental analysis

Ličen, Mina (author), Slapničar, Sergeja (author)

This paper examines the impact of process accountability on two biases causing myopic or short-sighted decision making. These biases are strong preferences for immediate and certain outcomes known as delay and risk aversion. We hypothe- size that accountability alone is insufficient to undo the biases, but if coupled with a cue on subjective discount rates, it will attenuate biases. To analyze our research question, we used a within- and between-subjects experimental design (two account- ability conditions compared with a non-accountability condition and with each other) with delay and probability discounting choice tasks involving 118 students of accounting, finance and management in an online experiment. In line with our hypotheses, we find that process accountability successfully reduces excessive delay and risk aversion only if it provides a cue about the subjective discount rate. We dis- cuss the implications of our findings for management control.

• Language: English
• Keywords: enterprises, management, accounting, analysis, process accountability, justification pressure, cognitive bias, myopic decision-making, delay aversion, risk aversion, time preference
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: In print
• Publication version: Version of Record
• Year: 2022
• PID: 20.500.12556/RUL-134964
• UDC: 657
• ISSN on article: 2191-4761
• DOI: 10.1007/s00187-021-00330-7
• COBISS.SI-ID: 91692547
• Publication date in RUL: 14.02.2022

Record is a part of a journal

• Title: Journal of management control
• Shortened title: J. manag. control
• Publisher: Springer
• ISSN: 2191-4761
• COBISS.SI-ID: 91689987

Licences

• License: CC BY 4.0, Creative Commons Attribution 4.0 International
• Link: http://creativecommons.org/licenses/by/4.0/
• Description: This is the standard Creative Commons license that gives others maximum freedom to do what they want with the work as long as they credit the author.
• Licensing start date: 01.01.2022

Secondary language

• Language: Slovenian
• Keywords: podjetje, managemant, računovodstvo, analiza

Projects

• Funder: ARRS - Slovenian Research Agency
• Funding programme: Raziskovalni program
• Project number: P5-0161
• Name: Izzivi vlagateljev, podjetij, finančnih institucij in države v negotovem evropskem gospodarskem okolju