Information, Incentives, and Attention: A Field Experiment on the Interaction of Management Controls

ABSTRACT We study the profit effects and interplay of two core accounting practices in a field experiment large retail chain. In 2 × factorial design, we vary (1) whether store managers obtain decision-facilitating information on metric (2) they receive performance pay based same metric. find that both increase profits significantly. contrast to reasoning standard economic theory, do not complementarity between interventions. Rather, detect evidence line with an attention-directing role practices: introduction each raises attention underlying objective, which induces countervailing substitution effect. JEL Classifications: J33; M52; C93.