An experimental analysis of the effect of recordkeeping over direct reciprocity

ABSTRACT This article experimentally investigates the impact of recordkeeping over the level of direct reciprocity. The study of reciprocity has been barely explored in accounting. This article helps to fill that gap by presenting the first investigation that provides experimental evidence of the causal relationship between recordkeeping and direct reciprocity. Reciprocity is a key aspect in the human cooperation process, based on its implications for the evolution of economic and social systems. However, understanding the mechanisms that promote it has been an important scientific challenge in various areas, such as biology, anthropology, sociology, psychology, and economics. The results of this study have an impact on accounting teaching as they provide a scientific basis that helps to improve the understanding of the role of accounting, through its most basic function, and its consequences for human cooperation. Moreover, they have implications for accounting research by showing the viability of using economic experiments to investigate emerging themes in accounting. Finally, from a practical viewpoint, the results of the research signal to the formulators of accounting control mechanisms the importance of considering the crowding out effect of those instruments over motivation. The research adopted a single-factor between-subjects experimental design with a pre-test and post-test and a control group. The causal inference was made using difference-in-differences regression models for panel data together with a variety of additional tests, aiming to give robustness to the results. The research presents evidence of the crowding out effect of recordkeeping over direct reciprocity in a trust game. This finding is important because it provides an explanation of how accounting, through its most basic function, influences human cooperation.