Various motivations for managerial (mis)reporting – an experimental study. (2nd December 2017)

• Record Type: Journal Article
• Authors: Rasmußen, Arleta; Leopold-Wildburger, Ulrike
• Is Part Of: Optimization. Volume 66:Number 12(2017)
• Page Start: 2107
• Page End: 2124
• Publication Date: 2017-12-02
• Subjects: Reporting behaviour -- honesty -- social value orientation -- integrity -- truth vs. optimization; A13 -- D82 -- D03; Mathematical optimization -- Periodicals; 519.7
• DOI: 10.1080/02331934.2016.1247158
• Languages: English
• ISSNs: 0233-1934

Abstract

Abstract: In the experiment we model all possible consequences from misreporting for both the shareholder and for the manager, since we are interested in patterns in reporting behaviour resulting from different motivations for potential misrepresentation. This allows for examining the stability of the (mis)reporting behaviour in different treatments. Agents are primarily driven by the consequences for themselves rather than by the consequences for the principal, while deciding on misreporting. Participants are willing to sacrifice a small gain for themselves in order to prevent a greater loss for the principal. If agents misreport, they do it in order to generate positive rather than negative consequences for themselves. Reports in favour of the principal, but fruitless or even costly for the agent are very rare. The experiment indicates also that pro-social agents report more truthfully than pro-self agents.