In Search of Informed Discretion (Revisited): Are Managers Concerned about Appearing Selfish?

Co-authored with Bart Dierynck and Jesse van der Geest

To improve the quality of performance evaluation and compensation decisions, managers can undertake costly searches for additional information about employees’ individual contributions to performance. Prior accounting research documents that managers are willing to undertake these costly information searches because they have social preferences (i.e., distributional fairness and reciprocity). However, our experimental results show that managers are significantly less willing to undertake costly information searches when the situation allows them to make fewer negative inferences when acting selfishly. Our findings are consistent with predictions rooted in behavioral economics and social psychology that even self-interested people exhibit pro-social behavior in some situations because they have concerns about appearing selfish toward themselves and others. We conclude that creating working conditions that increase managers’ concerns about their self-image may prompt them to make informed performance evaluation and compensation decisions.

Public Tax Disclosures and Investor Perceptions

Co-authored with Bart Dierynck, Martin Jacob, Maximilian Müller, and Christian Peters

To spotlight whether firms pay their "fair share'' and thereby crowd out aggressive tax avoidance, regulators are increasingly mandating tax disclosures. The assumption is that disclosures should help users identify aggressive tax avoiders. However, we find retail investors become worse at identifying firms using aggressive avoidance methods once receiving designated tax disclosures along with standard effective tax rate reconciliations. This experimental finding is consistent with our prediction rooted in attribute substitution theory that investors fixate on the designated tax disclosures when forming perceptions about whether firms pay their fair share. Our findings call for caution when implementing mandatory public tax disclosure.

Are All Readers on the Same Page? Predicting Variation in Information Retrieval from Financial Narratives

Co-authored with Ties de Kok and Christoph Sextroh

Retrieving information from financial narratives is a complex process that depends on how the text characteristics of narratives interact with the financial literacy of users. In this study, we develop a comprehensive measure for variation in information retrieval based on observed user behavior that is also able to incorporate understudied text characteristics such as the semantics and content of a narrative. Using a tool that tracks reading and marking behavior in a controlled environment, we first document how users with varying degrees of financial literacy retrieve information from financial narratives. We find significant variation among financial literacy groups that cannot be solely explained by text characteristics related to processing costs. Next, we use state-of-the-art machine-learning to predict variation in information retrieval for out-of-sample financial narratives, and we show that these predictions are incrementally associated with the post-announcement return volatility. Overall, our results suggest that efforts by regulators and corporations to simplify text characteristics of corporate communications might not resolve all differences in how users retrieve information from financial narratives.

Asymmetric Adjustment of Control

Job market paper

In this study, I examine whether principals’ experience with control decisions produces asymmetry in how they adjust their control over agents. Principals should be equally willing to decrease their control over agents as they are to increase their control over agents. However, building on psychological theory, I predict that experience with controlling agents reinforces a principal’s belief that agents are self-interested and that they should be controlled. In contrast, experience with not controlling agents does not reinforce a principal’s belief that agents are socially interested and that they should not be controlled. Accordingly, principals should be less willing to decrease their control over agents than they are to increase their control over agents. Results of my experiment support my prediction and also showcase conditions under which the asymmetry disappears. Overall, my study suggests that experience with controlling agents may cause principals to hold on to their control.

Doing the Right Thing: The Effect of Rotation Policies on Managers’ Reports about Measure Management

Co-authored with Eddy Cardinaels and Bart Dierynck

Measure management, which involves managing performance measures by distorting reporting and operational decisions, is a common problem for firms. We examine whether rotation policies help extract information about measure management from business unit managers. The results of our experiment show that rotation policies enable firms to extract more information about measure management from business unit managers. Firms also compensate managers less for their reported information about measure management. These findings are consistent with our prediction rooted in behavioral economics that the prospect of rotation causes managers to base their reporting decisions more on the increase in welfare reporting generates for the firm and less on the consequences of reporting for their own welfare. Our findings suggest that rotation policies have promising benefits for managerial reporting in firms, especially in the context of unit-specific information that is challenging and costly to extract.

The Sorting Benefits of Discretionary Adjustment to Performance-based Pay

Co-authored with Bart Dierynck

We use an experiment to test the hypothesis that adding discretionary adjustment to performance-based pay strengthens the sorting of employees based on how strongly they identify with the organization’s objectives. Our conceptualization of identification is grounded in identity economics, which predicts that employees who identify strongly with the organization’s objectives exert greater effort toward those objectives than employees who identify weakly with those objectives. Building on this conceptualization, we expect that employees anticipate that managers will adjust performance-based pay more (less) favorably when employees reveal strong (weak) identification with the organization’s objectives. Thus, when managers can adjust performance-based pay, performance-based pay contains a feature that benefits (disadvantages) employees with strong (weak) identification, which we expect to strengthen the sorting of employees based on their identification. Consistent with our hypothesis, we find that the difference in preferences for performance-based pay between employees with strong and weak identification is larger when discretionary adjustment accompanies performance-based pay than when it does not. Our results also confirm that employee identification increases employee costly effort exertion toward the organization’s objectives. We contribute to the management accounting literature on discretion in performance evaluation by documenting a previously undocumented benefit of discretionary adjustment.


WHU - Otto Beisheim School of Management (2019 - Present)

  • Management Accounting (Advanced Undergraduate Course)
  • Conducting and Communicating Research (Advanced Undergraduate Course)
  • Human Data Elicitation Tools (Advanced Undergraduate Course)

Tilburg University (2015 - 2019)

  • Behavioral Analysis of Accounting (Ph.D and Research Master Course)
  • MSc Thesis Accounting (Advanced Graduate Course)
  • Management Accounting (Intermediate Undergraduate Course)
  • Financial Accounting (Introductory Undergraduate Course)


Blog posts about programming accounting experiments

oTree video tutorials on Youtube

Lecture on experimental accounting research and oTree

Manuscript with a few writing aspirations

Slides about conducting and communicating about research