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We study moral judgments regarding budgetary slack made by participants at the end of a participative budgeting experiment in which an expectation for a truthful budget was present. We find that participants who set budgets under a slackinducing pay scheme, and therefore built relatively high levels of budgetary slack, judged significant budgetary slack to be unethical on average, whereas participants who set budgets under a truth-inducing pay scheme did not. This suggests that the slack-inducing pay scheme generated a moral frame by setting economic self-interest against common social norms such as honesty or responsibility. We also find that participants who scored high in traditional values and empathy on a pre-experiment personality questionnaire (JPI-R) were more likely to judge significant budgetary slack to be unethical. These results suggest that financial incentives play a role in determining the moral frame of the budgeting setting and that personal values play a role in determining how individuals respond to that moral frame.


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Hobson J, Mellon M, Stevens D. Determinants of Moral Judgments Regarding Budgetary Slack:An Experimental Examination of Pay Scheme and Personal Values. Behavioral Research In Accounting. March 2011;23(1):87-107. DOI: 10.2308/bria.2011.23.1.87

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