In round 2 the manager chose action 2 and was

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Unformatted text preview: subject chooses a different audit/fraud combination. The Message to Player B window on the bottom left appears only in YP settings. This window allows the manager to exercise his option to communicate a nonbinding intent to cooperate (Action 1). Auditors know that managers’ communications are nonbinding. The History window shows the history of play for past rounds. In Figure 1, the manager selected Action 1 in round 1, which generated a payoff of 78.34 (the manager was not sanctioned). In round 2, the manager chose Action 2 and was sanctioned, paying 68.64 for that round. In round 3, the manager chose Action 3 and was not sanctioned, receiving 139.29. Auditors’ screens had the same format as managers’ screens; a copy is available upon request. IV. HYPOTHESES The first set of hypotheses deals with auditors’ choices in the NP/WG setting to establish a benchmark. The second set of hypotheses compares the NP settings to the YP settings and the third set compares the WG settings with the SG settings. The last set of hypotheses compares regular play rounds to r...
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This note was uploaded on 01/27/2014 for the course ACCY 405 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.

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