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Knowledge transfer in project reviews: the effect of self‐justification bias and moral hazard
Author(s) -
Cheng Mandy M.,
Schulz Axel KD,
Booth Peter
Publication year - 2009
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.2008.00271.x
Subject(s) - cognitive dissonance , moral hazard , private information retrieval , agency (philosophy) , principal–agent problem , psychology , social psychology , actuarial science , marketing , business , economics , management , sociology , incentive , microeconomics , computer science , social science , corporate governance , computer security
Abstract In this study, we examine two factors that impact managers’ willingness to share private information during the project review stage of capital budgeting. Drawing on the cognitive dissonance theory and the agency theory, we find that both high perceived personal responsibility and the use of project reviews for performance evaluation result in a greater tendency for managers to withhold negative private information. However, we do not find an interaction between these two factors. Our study makes a contribution to both the academic literature investigating factors affecting project reviews and the practitioner literature looking at design and implementation of effective project reviews.