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Principles, Conformity, and Controls
William B. Tayler,
Cornell University
Robert J. Bloomfield, Cornell University
ABSTRACT. Results from a laboratory study show that initial control strength determines the principles decision makers believe govern appropriate behavior. Strong initial controls lead agents to apply a principle of self-interest in a social dilemma, while weak initial controls allow agents to apply a principle of social-interest. Because principles based on social-interest are inherently outward-looking, those principles magnify conformity to the observed behavior of others. The results clarify the mechanisms by which accounting controls, accounting regulations, and accounting-based performance compensation schemes, can “crowd out” socially desirable behaviors, such as honesty (Hannan et al. 2006), collaboration between firms (Christ et al. 2005), and taxpayer compliance (Frey and Feld 2002), and yields predictions that differ from extant models of conformity (Huddart and Fischer 2005; Davis et al. 2003), which typically assume that pressures for conformity are independent of control strength.
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