An Experimental Research On The Relation Among Information Symmetry, Ratchet Effect And Shirking In Budget

The budget is one of the widely used means in modern enterprisemanagement, and budget management is the core. However, due to theexistence of asymmetric information, the budget information tends to beunrealistic, even meaningless, which seriously does damage to theprincipal-agent relationship. The employees can make the budget slackwith private information, strive for lower budget target or higher resourceinput, underestimate outputs and overestimate the resource consumption,which causes the loss of enterprise resources and the declining ofoperation efficiency. The employees can also make shirking, whichmeans providing low efforts and getting more leisure time. Thephenomenon of asymmetric information exists objectively, but theintroduction of the other methods is the only way to balance theinformation symmetry and set limits to shirking. Whether the ratcheteffect, which is used to limit information symmetry, can really have thegreat impact on shirking? Based on the existing budgetary shirking theory, we think that thebudgetary shirking exists not only in managers, but also in employees.After signing the contract, the private opportunistic behavior ofemployees will cause increasing of cost of supervision and incentives. Atthe same time, the inner reason of the behavior is the psychologicalinternal cause. Therefore, limiting the budgetary shirking means limitingthe effects of psychological factors.Based on the experimental research, this paper focuses on therelationship of information symmetry, ratchet effect and budget shirking.The experimental results are as follows:First, construction of task is irrelevant to budgetary shirking.Second, the higher information asymmetry causes the lower budgetshirking;Third, the existing of ratchet effect causes more shirking in shortterm, but this paper predicts that it will restrain the generation ofbudgetary shirking.Forth，ratchet effect has interaction with information asymmetry, the combination of them will stimulate the generation of budgetary shirking.We also have studied the indirect effect of self-concern. Theconclusion of the study makes us informed that the self-concern playsimportant role in relation of information asymmetry, ratchet effect andbudget shirking. Then we think that to control the budget shirking, wehave to control the impact of self-concern, through setting targets moreclearly, more communication, reasonable compensation plan, buildingreputation mechanism and enterprise culture.