Do Good Intentions Pay Off? Employee Responses to Well-Intended Actions with Risky Outcomes

Research output: Contribution to journalResearch articleContributedpeer-review

Contributors

  • Andreas Ostermaier - (Author)
  • Peter Schäfer - , Technical University of Munich (Author)

Abstract

How does a subordinate react to the superior’s well-intended action when it is not certain that it will produce the intended outcome? The risk associated with the outcome creates moral wiggle room and thus poses a threat to the gift exchange between the superior and the subordinate. In a laboratory experiment, we first find that subordinates continue to reciprocate if the outcome risk is high. Second, however, subordinates’ response to a well-intended action that increases outcome risk depends on their inequality aversion. Weakly inequality-averse subordinates repay a kind action with a kind reaction if it decreases, but not if it increases, their outcome risk, whereas strongly inequality-averse subordinates react alike in both cases. Hence, a well-intended action is less worthwhile for subordinates if it increases than if it decreases outcome risk.

Details

Original languageEnglish
Pages (from-to)313 - 334
Number of pages22
JournalEuropean Accounting Review
Volume33
Issue number1
Publication statusPublished - 21 Jun 2022
Peer-reviewedYes
Externally publishedYes

External IDs

Scopus 85132792925

Keywords

Library keywords