Optimism and profit-based incentives in cost stickiness: an experimental study

This study aims to examine whether managerial optimism and profit-based incentives affect cost behavior asymmetry, especially stickiness. Differ from previous literature on stickiness, the researchers use an experimental 2 × between-within subjects factorial design. design allows us data related management specifically, not just in general term as studies using archival public financial statements. Our results reaffirm stickiness literature. focuses experiments among accounting students who are knowledgeable about asymmetry. Even though our 71 student participants know only symmetric theory, when presented with a scenario sales prospects information incentives, of this show otherwise. When more optimistic have been achieved, level is also higher.