S. W. Black, H. H. Kelejian; The Formulation of the Dependent Variable in the Wage Equation1, The Review of Economic Studies, Volume 39, Issue 1, 1 January 1972

This paper shows that the positive effects on decision making of financial incentives, performance feedback, and the requirement to justify one's decisions to others can be undermined or even reversed by the availability of a decision aid. More specifically, in the absence of a decision aid, subjects achieved greater classification accuracy in a repetitive decision task when a monetary incentive was offered, or when feedback about past performance was provided, or when they were required to justify their choices, relative to the absence of these three variables. In contrast, when a statistically valid decision aid was available, the same incentive, feedback, and justification requirements resulted in lower classification accuracy, again relative to the absence of these three variables. These results are interpreted within a framework having two basic tenets. First, financial incentives, performance feedback, and a justifi-

Safe harbor lease law, Taxation, Asset restructuring, Stock prices

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Auditing, Auditor independence, Management Advisory Services, ASR No. 250

Auditing, Internal controls, Audit judgement, Consensus

Disclosures, Standard setting process, Welfare effects of disclosure, Users of disclosures