Measuring Ethical Ideology in Business Ethics: A Critical Analysis of the Ethics Position Questionnaire

Individual differences in ethical ideology are believed to play a key role in ethical decision making. Forsyths (1980) Ethics Position Questionnaire (EPQ) is designed to measure ethical ideology along two dimensions, relativism and idealism. This study extends the work of Forsyth by examining the construct validity of the EPQ. Confirmatory factor analyses conducted with independent samples indicated three factors – idealism, relativism, and veracity – account for the relationships among EPQ items. In order to provide further evidence of the instruments nomological and convergent validity, correlations among the EPQ subscales, dogmatism, empathy, and individual differences in the use of moral rationales were examined. The relationship between EPQ measures of idealism and moral judgments demonstrated modest predictive validity, but the appreciably weaker influence of relativism and the emergence of a veracity factor raise questions about the utility of the EPQ typology.     

Are Audit-related Ethical Decisions Dependent upon Mood?

This study explores the impact of mood on individuals’ ethical decision-making processes through the Graham [Graham, J. W.: 1986, Research in Organizational Behavior 8, 1–52] model of Principled Organizational Dissent. In particular, the research addresses how an individual’s mood influences his or her willingness to report the unethical actions of a colleague. Participants’ experienced an affectively charged, unrelated event and were then asked to make a decision regarding whistle-blowing intentions in a public accounting context. As expected, negative mood was associated with lower intentions to report the unethical actions of others to a superior within the organization. The Graham model, which proposes that reporting intentions are impacted by the three determinants of seriousness, personal responsibility and cost, was employed to more clearly understand the nature of the affect–reporting intention relationship. The role of affect was explained by demonstrating that two determinants mediate the relationship between mood and whistle-blowing intentions. Specifically, as seriousness and responsibility have a positive impact on reporting intentions, the reduction of these perceptions by negative mood reduces the intent to report. The negative impact of personal cost on reporting intentions was significant, although not as a mediator of mood.Mary Curtis is an Associate Professor of Auditing and Accounting Information Systems in the Department of Accounting at the University of North Texas. Her research interests include Judgment and Decision-making in accounting and issues related to Information Systems Auditing.     

Time-on-the-Market as a Sign of Quality

The inferences a prospective home buyer can make about the quality of a house from the amount of time it spends on the market and the seller"s optimal strategy in light of these inferences are investigated. Depending upon the information structure, the seller may have an incentive to post an inordinately high initial price (in order to "dampen" the signal transmitted to future prospective buyers) or an inordinately low initial price (in order to make an early sale and avoid consumer "herding"). It is shown that the sellers of high-quality homes do best when inspection outcomes are publicly recorded and do worst when inspection outcomes are not public and the price history is not observable. Costly inspections create more adverse selection but deter consumer herding.     

Conjoint analysis of consumer preferences for roasted peanut products in Haiti

This study evaluated Haitian consumers’ preferences for three attributes of roasted peanuts: form (dry‐roasted vs. honey‐roasted), country of origin (Haiti vs. USA) and price (lowest vs. most common vs. highest). A sample of 199 respondents from three locations near Port‐au‐Prince revealed that price was overwhelmingly the most important attribute, although three well‐differentiated consumer segments were identified: the largest (44% of the sample) based strictly on price; a second (29%) distinguished by preference for honey‐roasted peanuts of Haitian origin; and a third (27%) preferring dry‐roasted peanuts imported from the USA. Segment membership was predicted by gender, education, household size, survey location and whether or not respondents were themselves the purchasers of the peanuts and peanut butter they consumed. Market simulation of a proposed, new domestic product (honey‐roasted peanuts from Haiti) revealed that a price near that of the currently imported product would maximize domestic revenues at about 15% above the current base.     

Who Initiates Recalls and Who Cares? Evidence from the Automobile Industry

In this paper, we investigate two questions. First, we explore which entity (the NHTSA or the manufacturer) is more likely to initiate a given auto safety recall campaign. Second, we analyze the determinants of owner response rates to safety recalls. Our data spans nineteen years (1980–1998) for the six largest auto manufacturers. We find evidence that the government initiates larger, less hazardous recalls involving older models and financially weak firms. Inexpensive recalls are more likely to be manufacturer initiated. The largest owner repair responses are associated with newsworthy hazardous defects of new domestic vehicles in their inaugural model year.     

The elementary economics of social dilemmas

Abstract.  A social dilemma is, in essence, a prisoners' dilemma in a continuous strategy space. I discuss a number of social dilemmas that have caught my attention, offer an elementary, diagrammatic synthesis of them, and discuss some of the economic insights that the diagrams capture, including incentives for pre‐commitment. Finally, I model pre‐commitment via delegation and link results to the literature on the evolution of preferences.