Description
This study uses a product pricing laboratory experiment to evaluate the presence of functional fixation and extends
prior research, particularly the work of Bloom et al. (1984) and Murray (1991) [Bloom, R., Elgers, P. T., & Murray, D.
(1984). Functional fixation in product pricing: A comparison of individuals and groups. Accounting, Organizations and
Society, 9(1), 1–11; Murray, D. (1991). Data fixation: Methodological refinements and additional empirical evidence.
Behavioral Research in Accounting, 3, 25–38] by incorporating a repeated measures design and a feedback variable.
Functional fixation was assessed by the degree of information processing changes in response to an accounting change.
The accounting change, in the form of a change in depreciation method (straight line to accelerated or accelerated to
straight line, respectively), was varied by the period in which the change occurred and by whether judgment policy
feedback was provided. Ten experimental conditions were utilized in the study: two control conditions with no
accounting change, four second-period accounting change conditions (two with feedback and two without), and four
third-period accounting change conditions (two with feedback and two without). A total of 190 subjects participated in
the study and made product pricing decisions for three sets of thirty products each, each constituting a separate period.
In four of the 10 conditions, subjects received feedback during the second and third period in the form of cue weights
and estimated prices based on the preceding task. Overall, results indicate that functional fixation is present, and that
the period of the accounting change and feedback do not significantly influence it.
doc_253539060.pdf
This study uses a product pricing laboratory experiment to evaluate the presence of functional fixation and extends
prior research, particularly the work of Bloom et al. (1984) and Murray (1991) [Bloom, R., Elgers, P. T., & Murray, D.
(1984). Functional fixation in product pricing: A comparison of individuals and groups. Accounting, Organizations and
Society, 9(1), 1–11; Murray, D. (1991). Data fixation: Methodological refinements and additional empirical evidence.
Behavioral Research in Accounting, 3, 25–38] by incorporating a repeated measures design and a feedback variable.
Functional fixation was assessed by the degree of information processing changes in response to an accounting change.
The accounting change, in the form of a change in depreciation method (straight line to accelerated or accelerated to
straight line, respectively), was varied by the period in which the change occurred and by whether judgment policy
feedback was provided. Ten experimental conditions were utilized in the study: two control conditions with no
accounting change, four second-period accounting change conditions (two with feedback and two without), and four
third-period accounting change conditions (two with feedback and two without). A total of 190 subjects participated in
the study and made product pricing decisions for three sets of thirty products each, each constituting a separate period.
In four of the 10 conditions, subjects received feedback during the second and third period in the form of cue weights
and estimated prices based on the preceding task. Overall, results indicate that functional fixation is present, and that
the period of the accounting change and feedback do not significantly influence it.
doc_253539060.pdf