No. 72: Transparency and biases in subjective performance evaluation

Jahr: 2022
Typ: Working Paper


One of the major functions of accounting is to report unbiased numbers. In this paper, we demonstrate how favoritism may bias results and also how greater transparency can mitigate this bias. We examine whether one subtle feature of transparency – the physical presence of a stakeholder during the evaluation process – mitigates favoritism biases in subjective evaluations. Using archival data from professional ski jumping, we find that, controlling for objective performance indicators, subjective evaluations suffer from favoritism. In particular, evaluators favor athletes of their own nationality and athletes that have a compatriot on the evaluation panel. We test our transparency hypothesis taking advantage of the situation where, during lockdowns, sports competitions took place without an audience on-site. We predict and provide evidence that the physical presence of an audience during the decision-making process is associated with lower levels of favoritism in subjective evaluations. As such, we contribute to the accounting literature by highlighting how transparency may decrease the likelihood that subjective evaluations are biased by favoritism.

Beteiligte Institutionen

Die Hauptstandorte vom TRR 266 sind die Universität Paderborn (Sprecherhochschule), die HU Berlin und die Universität Mannheim. Alle drei Standorte sind seit vielen Jahren Zentren für Rechnungswesen- und Steuerforschung. Hinzu kommen Wissenschaftler der LMU München, der Frankfurt School of Finance and Management, der WHU – Otto Beisheim School of Management, der ESMT Berlin und der Goethe-Universität Frankfurt, die die gleiche Forschungsagenda verfolgen.