University of Illinois Urbana-Champaign

The effects of contract framing on misconduct

Nichol, Jennifer Eve

Content Files
NICHOL-DISSERTATION-2015.pdf

Permalink

https://hdl.handle.net/2142/78388

Description

Title
The effects of contract framing on misconduct
Author(s)
Nichol, Jennifer Eve
Issue Date
2015-04-16
Director of Research (if dissertation) or Advisor (if thesis)
Chen, Clara
Doctoral Committee Chair(s)
Chen, Clara
Committee Member(s)
  • Peecher, Mark
  • Autrey, Romana
  • Mahoney, Joseph
Department of Study
Accountancy
Discipline
Accountancy
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Date of Ingest
2015-07-22T22:16:48Z
Keyword(s)
  • Contract framing
  • Misreporting
Abstract
This study examines the effects of incentive contract framing on two types of misconduct: misreporting and shirking. I conduct a 2x2 between subjects experiment, manipulating incentive contract framing (Bonus/Penalty) and the awareness of the opportunity to misreport (Before Effort/After Effort). I predict and find that (1) penalty contracts cause a higher rate and degree of misreporting, (2) this greater misreporting occurs due to a greater sense of entitlement to the incentive funds, and (3) even though misreporting occurs more with penalties, people shirk more in response to a bonus. Collectively, this study’s theory and results indicate that while penalty contracts can increase effort relative to bonus contracts, they also encourage greater dishonesty in reporting when that effort is not successful.
Graduation Semester
2015-5
Type of Resource
text
Permalink
http://hdl.handle.net/2142/78388
Copyright and License Information
Copyright 2015 Jennifer Nichol

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