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14 5237 the weak group and strong group settings

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Unformatted text preview: ditor/manager pair and is calculated by subtracting the auditor’s total ex post expected payoffs from the manager’s expected payoff (based on audit and fraud-level combinations for each party, as in Table 1). Table 3 summarizes the three measures across the four settings for the regular play phase. Column 2 shows data for the NP settings and column 3 shows data for the YP settings. The differences between the two puffery conditions appear in column 4. For example, the number 29.77 in column 4 for the NP/WG setting represents the difference between the average audit index across the NP/WG and YP/WG settings (82.14 – 52.37). The weak group and strong group settings appear in the rows of the table, with the bottom three rows showing the differences in the measures between the weak and strong group treatments. Results for H1: Hypotheses for the NP/WG Setting (Baseline) This hypothesis investigates audit levels in the NP/WG setting. The two alternatives are the Nash and the trust predictions. Panel...
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