Murphy's Law: A New Perspective for Management Accounting Research

Abstract

A corollary to Murphy's Law is: The other lane always moves faster than my lane. We show that even when the law is objectively untrue, because of sampling bias, people perceive the law as true. A manager who is aware of this perceptual bias will try to structure her budget cutbacks and all other "negative compensations" in such a way that her employees perceive that the cutback applies to everyone, not just to themselves. This finding has significant implications for future management accounting research.