Improving Subjective Probability Assessment for Planning and Control in Team-like Organizations.

Explicit recognition of uncertainty is one feature of much recent work in managerial accounting and, more generally, work in the areas of planning and control. This has led to an increased interest in the use of subjective probability assessments. Often overlooked, however, are the possibilities for subordinates to induce organizational suboptimization via their reported subjective probability assessments. We discussed two specific problems associated with reported subjective probability assessments: (1) dishonest assessments and (2) substantively deficient assessments. Two schemes for alleviating these problems -- the use of scoring rules and Bayesian model comparison procedures -- were then presented and discussed. The limitations and speed-of-effect of each scheme were considered, yielding some nonobvious implications. The organizational framework used throughout this paper incorporated some important features from the theory of teams. [ABSTRACT FROM AUTHOR]