Journal article

The effect of information asymmetry on negotiated budgets: An empirical investigation

J Fisher, JR Frederickson, SA Peffer

Accounting, Organizations and Society | Published : 2002

Abstract

This study examines three issues: (1) the effect of information asymmetry on the budget negotiation process, (2) the effect of information asymmetry on budgetary slack when budgets are set through a negotiation process, and (3) whether subordinates consider superiors imposing a budget following a failed negotiation as being low in procedural justice, which in turn causes low subordinate performance. The results suggest that smaller differences in initial negotiation positions do not indicate a higher likelihood of agreement when initial differences are due to differential information symmetry. Further, information asymmetry affects the relationship between negotiation agreement and budgetary..

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University of Melbourne Researchers

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