Commitment issues in budgeting

Article Abstract:

An extension of Antle and Fellingham's (1995) study on information system design in a budgeting context was conducted. In their paper, the center or the principal can make a commitment to what information is to be tracked and to the application of the tracked information. To further their study, the principal is assumed to possess limited commitment capabilities. The principal can commit only to what information is to be tracked but not to how this information is to be employed. In such an environment, the center occasionally opts for a coarser monitoring system in the absence of perfect monitoring. The coarser monitoring system generates self-reported information from the manager but is relevant only if the reporting system provided to the manager for imparting private communication is likewise coarse.

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Option value to waiting created by a control problem

Article Abstract:

A principal may benefit by delaying a capital project in order to determine from an agent the cost of a second capital improvement project.

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Agent employment horizons and contracting demand for forward-looking performance measures

Article Abstract:

Research indicates that performance measures aimed at future performance will increase an agent's time frame for employment

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