order to control for potentially confounding effects, including participants appearance, gender, mannerisms, and prior acquaintance (i.e., whether paired participants know one another). At period end, auditor-client dyads are randomly reassigned. Participants do not receive feedback on realized asset values throughout the experiment. We suppress feedback in order to reinforce the fact that each period represents an independent, one-shot negotiation. Furthermore, feedback on asset value is lagged in naturally-occurring settings. Our experimental context is purposefully stark, which circumvents possible confounds associated with participants’ beliefs about how they are supposed to behave in auditor-client settings. We are interested in how auditor-client dyads determine a reported amount, abstracting away from other potentially noisy factors (see also Wang and Tuttle 2009; Wang 2010). At the beginning of each period, neither player knows the actual asset value. We make this choice to control participants’ bargaining power, such that one player does not have an advantage over the other (discussed below). The players negotiate over an acceptable reported asset value, which impacts their payoffs. The actual asset value is determined by drawing from a uniform distribution that ranges from 50 to 1,000 in increments of 50. So the asset takes one of 20 values, each having a 5 percent chance of realization. The actual asset value is randomly generated for each auditor-client dyad per period. The instructions include a chart that lists potential values, the probability of occurrence, and the probability that the amount exceeds the actual asset value (see also Wang and Tuttle 2009; Wang 2010). The chart is reproduced in Table 1. [Insert 1 about here.] Negotiations take place as follows. The client begins by proposing a reported amount. The reported amount is communicated to the auditor, who either accepts or makes a counteroffer.
order to control for potentially confounding effects, including participants appearance, gender, mannerisms, and prior acquaintance (i.e., whether paired participants know one another). At period end, auditor-client dyads are randomly reassigned. Participants do not receive feedback on realized asset values throughout the experiment. We suppress feedback in order to reinforce the fact that each period represents an independent, one-shot negotiation. Furthermore, feedback on asset value is lagged in naturally-occurring settings. Our experimental context is purposefully stark, which circumvents possible confounds associated with participants’ beliefs about how they are supposed to behave in auditor-client settings. We are interested in how auditor-client dyads determine a reported amount, abstracting away from other potentially noisy factors (see also Wang and Tuttle 2009; Wang 2010). At the beginning of each period, neither player knows the actual asset value. We make this choice to control participants’ bargaining power, such that one player does not have an advantage over the other (discussed below). The players negotiate over an acceptable reported asset value, which impacts their payoffs. The actual asset value is determined by drawing from a uniform distribution that ranges from 50 to 1,000 in increments of 50. So the asset takes one of 20 values, each having a 5 percent chance of realization. The actual asset value is randomly generated for each auditor-client dyad per period. The instructions include a chart that lists potential values, the probability of occurrence, and the probability that the amount exceeds the actual asset value (see also Wang and Tuttle 2009; Wang 2010). The chart is reproduced in Table 1. [Insert 1 about here.] Negotiations take place as follows. The client begins by proposing a reported amount. The reported amount is communicated to the auditor, who either accepts or makes a counteroffer.
Auditor-Narcissism-Paper-10-6-2016.docx