I am a PhD Candidate in accounting expecting to graduate in June 2019. I have a keen interest in understanding how individuals design, use, and respond to accounting information and control systems. To answer my research questions, I develop experiments using programming packages such as oTree.
PhD student in Accounting
Tilburg University (2015 - 2019)
Reseach Master in Accounting
Tilburg University (2013 - 2015)
Master in International Management
Tilburg University (2012 - 2013)
Victor van Pelt
I examine how principals adjust past control decisions when the economic costs of controlling agents change. Using a laboratory experiment, I establish that principals decrease control less when controlling agents becomes more expensive than they increase control when controlling agents becomes cheaper. I examine the mechanisms of this asymmetric adjustment pattern and provide evidence that principals exhibit this asymmetry because they develop “sticky” beliefs that agents are self-interested, causing them to suppress information about an increase in the economic costs of controlling agents. Further testing also reveals that the asymmetric adjustment pattern disappears when principals’ “sticky” beliefs about self-interested agents have less time to develop.
Ties de Kok, Christoph Sextroh, and Victor van Pelt
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.
Farah Arshad, Bart Dierynck, and Victor van Pelt
We design a series of laboratory hierarchies to examine whether granting reporting responsibility to managers has a purpose beyond eliciting information from managers. In our laboratory hierarchies, an owner, employee, and manager repeatedly cooperate over a fixed number of periods. In our main experimental treatment, managers can periodically report privately held information to elicit cooperative behavior from owners and employees. Frictions arise over managers’ incentives to withhold their information so they can extract wealth from the firm undetected. We design two additional experimental treatments in which the manager carries no reporting responsibility and his or her information is either readily available or unavailable to the owner and the employee, enabling us to disentangle different effects produced by managers’ reporting choices. We establish that granting managers reporting responsibility may have effects beyond the elicitation of information from managers, leading to more socially efficient outcomes. Managerial reporting may have value even when technological advancements completely replace the production and distribution of information in firms.
Eddy Cardinaels, Bart Dierynck, and Victor van Pelt
We experimentally examine how rotating managers impacts their willingness to report about operational distortions to performance measurement at their business unit. In our laboratory experiment, managers can either exploit operational distortions or report them to elicit rewards from the firm. Prior literature suggests that rotating managers enables firms to extract the same information about operational distortions from managers at a lower cost because rotation lowers the economic value of operational distortions for managers. Consequently, rotation policies allow firms to reward managers less for the reports they produce. Although our laboratory experiment confirms that firms benefit from having a rotation policy in place, it is for a different reason. We establish that rotation policies cause managers to report more information about operational distortions because they trigger managers to view their reporting decision less as an economic decision and more as a decision that enables them to “do what’s right” for the firm without the aim to benefit from operational distortions economically.
Bart Dierynck and Victor van Pelt
While discretionary adjustment is a salient feature of performance evaluation and influences employee behavior during the evaluation period, we know little about whether and how discretionary adjustment generates sorting effects on desirable employee characteristics. In this study, we develop and test theory suggesting that adding discretionary adjustment to performance-based pay facilitates the attraction of employees that identify more strongly with the organization’s objectives. Results from a laboratory experiment show employees’ preferences for pursuing the organization’s objectives have a stronger positive effect on their preference for performance-based pay when performance-based pay is accompanied by discretionary adjustment than when it is not. Complementing performance-based pay with discretionary adjustment may, therefore, improve sorting on identification with the objectives of the organization. The mechanism behind this sorting effect is that employees anticipate that managers will adjust performance-based pay more (less) favorably when employees reveal a strong (weak) preference for pursuing the organization’s objectives. The documented sorting effect also has value for the organization: employees who reveal a stronger preference for pursuing the organization’s objectives exert more costly effort toward those objectives and this effect is mediated by a preference for performance-based pay when discretionary adjustment is present. We contribute to accounting research and practice by documenting a new and previously unknown consequence of discretionary adjustment that can enrich the tradeoff that managers make when designing their performance evaluation system.