A grant of 20,000 British Pounds was awarded to a research team, led by <link people frank-hartmann>Prof. Frank Hartmann from Erasmus University. Their research project is entitled 'Incentives, Accountability and Decision Making: A Neuroscientific Investigation'.

The objective of the research project is to analyse the neurological basis of individual decision making under financial incentives and accountability pressures. A large part of decisions are made intuitively, influenced by emotions, rather than analytically, based on reason.

The investigation focuses on the human tendency to prefer less favourable short-term outcomes over more favourable long-term outcomes, which often causes dysfunctional organisational behaviour. This often leads to break downs of individual corporations and whole economic systems.

The funding comes from Chartered Institute of Management Accountants (CIMA), which is the world’s largest professional body of management accountants. 

“This is great news,” says Hartmann, Professor of Accounting and Management Control. “It’s a really innovative investigation and methodology for business and accounting,” he added.

Hartmann says that understanding how the brain reacts to various forms of incentives will have important implications on the design of incentive schemes intended to guide managerial behaviour and advance the theory of decision making.

The investigation is estimated to take 18 months and is expected to be completed in June 2014.