Information Provision, Incentives, and Attention: A Field Experiment on Facilitating and Influencing Managers' Decisions

The core role of managerial accounting is to provide information facilitate managers' decisions and influence their behavior through incentives. We study the impact these two roles on profits by implementing a field experiment in large retail chain. In 2 × factorial design, we vary: (i) whether store managers obtain access decision-facilitating profit margins individual products (ii) they receive performance pay based an objective metric decisions. find that both practices increase significantly, albeit different behavioral channels. particular, make use provided placing higher-margin products, thereby raising gross margin. While hypothesized priori are complements, increases induced combined intervention do not significantly exceed those separate interventions. attribute this finding attention-directing interventions toward profits, inducing countervailing substitution effect. show effect fades over time such tends induce more persistent increases.