The Choice of Schrödinger's Cat: Expected Availability of Outcome Knowledge to Principals Affects Risk Behavior of Accountable Agents

Accountability is at the heart of social, political, and organizational relations. Holding elected officials accountable to the public is an essential element of democratic governance as well as a key mechanism in... [ view full abstract ]

Accountability is at the heart of social, political, and organizational relations. Holding elected officials accountable to the public is an essential element of democratic governance as well as a key mechanism in organizations, public and private alike. However, accountability involves evaluations which typically rely on outcome knowledge and which are therefore susceptible to outcome bias. Research on outcome bias has hitherto tended to focus on the biased evaluation per se. The current investigation shifts the attention to the effect of anticipated outcome knowledge on foresight judgments and consequently on decisions. This paper reports the results of two experimental studies that test the effect of outcome knowledge availability on behavior and judgments in this context. The first study examines real behavior and involves actual monetary gains and losses, and the second is based on a scenario that describes the same financial dilemma. The results suggest that, when making decisions under outcome-knowledge-based accountability, people anticipate the effect of outcome judgments passed by another party to which they are accountable, and adjust their behavior by opting for a less risky alternative. Implications of this behavior for public decision-making are discussed.