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Fall 2014 Colloquium-Oct 24, 2014 (1:30-3PM)

Room 1170 Grainger Hall

Two recently completed experiments 
conducted in BRITE will be presented:

Me vs. We: The Effect of Incomplete Team Member Feedback on Effort Allocation between Individual and Team Output", [Tyler Thomas, Accounting & Information Systems]:We investigate the effect that feedback about team member contributions to team production have on an individual’s subsequent contribution to team production. Specifically, we examine how individuals respond differentially to feedback about a team member’s input contributions to team production (i.e., time contributed) compared to feedback about a team member’s output contributions to team production (i.e., production units contributed). Prior literature suggests that individuals attribute different meaning and intent to inputs versus outputs leading to differential responses. We predict that when individuals view input feedback that negative reciprocity (allocating effort away from team performance) will be greater than positive reciprocity (allocating effort to team performance) compared to when output feedback is provided, as with input feedback individuals can be more certain of the intent and motivation of their team members’ actions. We provide preliminary experimental evidence that individuals do differentially reciprocate to input and output feedback of team member contributions. Further, we show that when individuals view input feedback of team member contributions, negative reciprocity outweighs positive reciprocity resulting in lower total team performance than when team member output feedback is provided.

Realigning Auditors’ Incentives: Experimental Evidence of a Third-party Hiring System”, [Brian Mayhew, BRITE Lab Director]: We use experimental economic markets to compare market dynamics when an independent third-party – as opposed to the company – hires an auditor. Our markets examine the effect on audit quality of directly increasing auditor independence by changing who hires the auditor. We find evidence that auditors who are hired by an independent third-party engage in significantly higher levels of investigation than when hired by managers, even under moral hazard and when the third party randomly selects auditors. Investor confidence in financial information increases as evidenced by higher bids for assets audited by these higher quality auditors selected by a third party. We also provide evidence that higher quality auditing leads to less manager misreporting.  

Oct 16, 2014, 12:26 PM