Sabotage in Capital Budgeting: The Effects of Control and Honesty on Investment Decisions
通过实验室实验，研究经理人因不信任的正式控制而破坏投资的行为，发现诚实偏好能抑制这种破坏，并揭示诚实通过吸收负向互惠间接减少破坏。
This study investigates the sabotage of investments in response to hurdle contracts as a means of formal control in capital budgeting. We conduct a laboratory experiment to examine factors that drive or inhibit sabotage. Sabotage occurs when the manager provides false information to prevent the firm from realizing a profitable investment, which is costly both for the manager and the firm. Our results show that managers sabotage investments to reciprocate for distrustful formal control. Conversely, budget communication that requires factual assertions and thus activates managers' preference for honesty inhibits sabotage. Moreover, honesty suppresses negative reciprocity and thus reduces sabotage not only directly but also indirectly. Our findings warn firms to consider the sabotage of investments as a hidden cost of control in budgeting. They show that honesty has a spill-over effect, as it absorbs negative reciprocity.