In search of informed discretion (revisited): Are managers concerned about appearing selfish?

Managers can undertake a costly search to gather additional information about employee performance. Previous management accounting research attributed these actions to inherent social preferences, such as fairness and reciprocity. To further refine this explanation, we conducted a replication and extension of prior experimental work. Our findings suggest that managers’ willingness to gather additional information at their own expense also depends on situational factors, particularly situational factors altering managers’ concerns of being perceived as selfish if they do not gather additional information. These findings align with insights from behavioral economics and social psychology, indicating that situational factors may induce self-interested individuals to exhibit prosocial behavior. The implication of our result is that creating working conditions that increase managers’ concerns about appearing selfish may encourage them to make more informed performance evaluation and compensation decisions.