Who’s the Boss? The Economic and Behavioral Implications of Various Characterizations of the Superior in Participative Budgeting Experiments

48 Pages Posted: 19 Aug 2012 Last revised: 17 Apr 2015

See all articles by Alisa Brink

Alisa Brink

Virginia Commonwealth University (VCU)

Jennifer C. Coats

Colorado State University, Fort Collins

Frederick W. Rankin

Colorado State University, Fort Collins - College of Business

Date Written: August 19, 2012

Abstract

In most organizations, budgets are important mechanisms for planning and control and for motivating subordinate performance. Accordingly, budgeting is one of the most extensively studied topics in managerial accounting. We analyze previous research by first classifying studies according to their characterization of the superior which we label Homo Economicus, Homo Optimas and Homo Vivas. Homo Economicus is a rational economic agent who accepts all budgets because it is in her best interest to do so. Homo Optimas employs the optimal hurdle-rate contract. Finally, Homo Vivas is an experimental participant whose role depends on the decisions she is allowed to make as determined by the experimental design. We explore the economic and behavioral implications of each type of superior for the interpretation of extant research and we provide directions for future research in participative budgeting.

Keywords: participative budgeting, budgetary slack, superior type

JEL Classification: C91

Suggested Citation

Brink, Alisa and Coats, Jennifer C. and Rankin, Frederick W., Who’s the Boss? The Economic and Behavioral Implications of Various Characterizations of the Superior in Participative Budgeting Experiments (August 19, 2012). AAA 2013 Management Accounting Section (MAS) Meeting Paper. Available at SSRN: https://ssrn.com/abstract=2132107 or http://dx.doi.org/10.2139/ssrn.2132107

Alisa Brink

Virginia Commonwealth University (VCU)

1015 Floyd Avenue
Richmond, VA 23284
United States

Jennifer C. Coats

Colorado State University, Fort Collins ( email )

Fort Collins, CO 80523-1771
United States

Frederick W. Rankin (Contact Author)

Colorado State University, Fort Collins - College of Business ( email )

Fort Collins, CO 80523
United States

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