Contracting on Contemporaneous versus Forward-Looking Measures: An Experimental Investigation*


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    Accepted by Alan Webb. This paper has benefited from comments by Alan Webb (associate editor) and anonymous reviewers, as well as from Ramji Balakrishnan, Eddy Cardinaels, Jonathan Grenier, Lynn Hannan, Lisa Koonce, Joan Luft, Liesel Mitchell, Don Moser, Mark Nelson, Mark Peecher, and Hongmei Zhao; and workshop participants at Emory University, Georgia State University, the 2005 American Accounting Association ABO Section Conference, the 2006 American Accounting Association Management Accounting Section Conference, and the 2006 Global Management Accounting Research Symposium. We thank the Research Computing staff in the Goizueta Business School at Emory University (especially Lisa Harris) for development of the program used in the experiment. We thank the Lost Dog Cafe in Arlington, Virginia and Zingerman's in Ann Arbor, Michigan for allowing us to use their creative and extensive sandwich menus in our experimental task.