An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Laura Francis - Gladney
State University of New York Institute of Technology

Robert B. Welker
Southern Illinois University

Nace Magner
Western Kentucky University

Abstract: This study examines whether egocentricity affects the degree with which budget participants interpret low budgetary influence as pseudo-participative. Egocentricity is the self-serving inclination of humans to blame others for unfavorable outcomes they receive and to accept responsibility for favorable outcomes they receive. Experimental participants made budget requests but had low influence on the budget decision. Influence was set at two levels of favorability: receiving a performance budget either substantially above (unfavorable) or below (favorable) requested amounts. We found that favorable budget outcomes produced an egocentric reduction in perceived pseudo-participation for favorable budget outcomes, but we did not find an egocentric effect for unfavorable budget outcomes. In addition, we found that budget participants associated moderately high levels of pseudo-participation with both favorable and unfavorable budget outcomes.

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