The Role of Informal Controls and a Bargaining Opponent's Emotions on Transfer Pricing Judgments

While accounting research has demonstrated the role of a decision maker's own emotions during judgments, psychology research proposes that others’ emotions provide an informational signal to assess an opponent's limits, cooperativeness, and toughness during bargaining. We examine how a bargaining opponent's emotions provide information signals that can be used by a selling division manager during transfer pricing decisions and whether informal control system choices by corporate management to foster cooperation can create a context that influences how managers react to these signals. In an experiment, when informal controls to encourage cooperation were absent (less collaborative environment), managers’ selling price estimates were more conciliatory when the opponent was described as displaying negative emotions than when described as displaying positive emotions. However, when informal controls to cooperate were present (more collaborative environment), managers’ selling price estimates were more conciliatory when the opponent displayed positive rather than negative emotions. Path analyses suggest that managers’ perception of their opponents’ signals is the mechanism by which opponents’ emotions influence transfer‐price decisions. This study highlights the role of others’ emotions as information signals during accounting bargaining and provides insight into the context dependency of opponents’ emotions under various control system structures.     

Structural interactions in spatial panels

Until recently, considerable effort has been devoted to the estimation of panel data regression models without adequate attention being paid to the drivers of interaction amongst cross-section and spatial units. We discuss some new methodologies in this emerging area and demonstrate their use in measurement and inferences on cross-section and spatial interactions. Specifically, we highlight the important distinction between spatial dependence driven by unobserved common factors and those based on a spatial weights matrix. We argue that purely factor-driven models of spatial dependence may be inadequate because of their connection with the exchangeability assumption. The three methods considered are appropriate for different asymptotic settings; estimation under structural constraints when N is fixed and T → ∞, whilst the methods based on GMM and common correlated effects are appropriate when T ≫ N → ∞. Limitations and potential enhancements of the existing methods are discussed, and several directions for new research are highlighted.     

ENERGY UTILITIES, CONSERVATION, AND ECONOMIC EFFICIENCY

Academic and policy debate has centered around an apparent "underinvestment in conservation." This paper outlines traditional explanations for underinvestment and presents a prospect theory analysis of individual conservation behavior. On the basis of investment criteria, individuals seem to discriminate against conservation investments. While these decisions might appear rational as life style decisions, individual choice across different household appliances shows little consistency. For policymaking purposes, understanding and modeling actual behavior is crucial to maximizing social welfare. The insight of certain positive models of human behavior supports economic efficiency arguments for marketplace intervention. This paper argues that because individuals making conservation investment decisions apparently do not act according to the dictates of utilitarian economics, utility sponsored conservation programs are justified on economic efficiency grounds. Finally, in light of prospect theory considerations, the paper suggests marketing guidelines for conservation investments sponsored by electric utilities.     

Impact of peer influence and government support for successful adoption of technology for vocational education: A quantitative study using PLS-SEM technique

Quality & Quantity - Government of India (GOI) has introduced Vocational Education and Training (VET) program. Technology adoption along with peer influence and government support are perceived...