Functional Fixation and Interference Theory: A Theoretical and Empirical Investigation.

Susan Haka; Lauren Friedman; Virginia Jones

doi:10.2308/tar-4491674

Functional Fixation and Interference Theory: A Theoretical and Empirical Investigation.

Susan Haka¹; Lauren Friedman²; Virginia Jones³

¹ Assistant Professor of Accounting, Michigan State University. 1 · ² Vice President, Bank of America. 2 · ³ Auditor, Touche Ross & Co. 3

The Accounting Review 1986

ABSTRACT: This study uses interference theory to test the hypothesis that exposure to cost and income measures causes fixated responses in a decision-making setting where market value is the appropriate response. These fixated responses have been observed in both the functional fixation and prospect theory literatures and are related to materiality and certainty. The number of accounting courses subjects had completed was used as a surrogate for amount of exposure to cost and income. Approximately 50 percent of the subjects exhibited evidence of fixation on either income or cost measures. Materiality, but not certainty, had an impact on the fixation. Exposure to accounting courses was not related to this fixation. In fact, weak support was found for accounting as an aid in encoding the correct (i.e., market value) response. Age was the only variable positively correlated with the improper use of cost and income data.

DOI: 10.2308/tar-4491674
Volume: 61 (3)
Pages: 455-474
Language: en
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