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An Experimental Investigation of the Gift-Exchange Model in a Multitask Environment With Managerial Reporting

Michael Majerczyk ^a

Bei Shi ^b

^aGeorgia State University, USA

^bUniversity of Amsterdam, Netherlands

Advances in Accounting Behavioral Research

ISBN: 978-1-80382-802-2, eISBN: 978-1-80382-801-5

Publication date: 25 August 2022

Abstract

We use a laboratory experiment to examine a multitask environment common to practice, in which managers have multiple responsibilities, including both managerial reporting, as in participative budgeting settings, and effort provision toward daily tasks. Consistent with typical contracting arrangements, we examine incomplete contracts where honesty and effort are not enforceable. In such a multitask environment, when employers choose to offer comparatively generous wages to managers, we predict that managers will elect to provide higher effort. Meanwhile, we remain agnostic ex ante about the degree of misreporting due to findings in studies on gift exchange, moral licensing, and moral wiggle room. Overall, we find evidence that reciprocity, consistent with the gift-exchange model, does extend across both tasks. Implications for theory and practice are discussed.

Keywords

Acknowledgements

Acknowledgments

We would like to thank Khondkar Karim (editor), Eddy Cardinaels, James Cox, Matt DeAngelis, Robbie Moon, Shankar Venkatraman (discussant), an anonymous reviewer, and participants at the brownbag series at Georgia State University and the 2016 AAA Southeast Region Doctoral Student/Faculty Interchange for their helpful feedback. We are grateful for the financial support from the School of Accountancy at Georgia State University.

Citation

Majerczyk, M. and Shi, B. (2022), "An Experimental Investigation of the Gift-Exchange Model in a Multitask Environment With Managerial Reporting", Karim, K.E. (Ed.) Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 25), Emerald Publishing Limited, Leeds, pp. 227-247. https://doi.org/10.1108/S1475-148820220000025010

Publisher

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Emerald Publishing Limited