Functional and Data Fixation
ALTERNATIVE METHODOLOGY FOR DATA-FIXATION RESEARCH
Most of the empirical studies in data-fixation research have been based on laboratory or field experiments, with the exception of one single case based on a survey. In addition, with few exceptions, these experiments have used students as subjects, thereby raising problems of external validity. The tasks have not been realistic or motivating and have required judgmental rather than optimal behavior. What stands out upon review of the accountancy and psychological literature on the phenomenon is the urgent need for a better methodology, one that will allow direct observation of the process by which a decision is made. An appropriate methodology would be some form of protocol analysis, in which the subjects are asked to think aloud while solving the requirements of an ex- perimental task. Such an approach would answer some very important questions. 1. Did the subject note the change?
3. Was the change understood?
4. Was the change ignored on grounds of its materiality, etc.?78
Better insights on the phenomenon of functional fixation may be possible through the use of protocol analysis, as the experiments use richer tasks, smaller pools of subjects, and better debriefing.
CONCLUSION
Functional fixation as observed in psychology and data fixation as observed in accounting need to be better examined and explained. Future research should provide theoretical as well as empirical explanations of the reasons why subjects in accounting experiments persist in failing to adjust their decision process in response to accounting changes. In addition, richer and more realistic experi- mental tasks, sophisticated subjects, as well as protocol analysis ought to be used to provide better explanations of the phenomenon if it exists.
NOTES
1. N.R.F. Maier, “Reasoning in Humans: The Mechanisms of Equivalent Stimuli and Reasoning,” Journal of Experimental Psychology (April 1945): 349–60.
2. K. Duncker, “On Problem Solving,” Psychological Monographs 58, no. 5 (1945). 3. H.G. Birch and H.S. Rabinowitz, “The Negative Effect of Previous Experience on Productive Thinking,” Journal of Experimental Psychology (February 1951): 121–25.
4. J.H. Flavell, A. Cooper, and R.H. Loisell, “Effect of the Number of Pre-utilization Functions on Functional Fixedness in Problem Solving,” Psychological Reports (June 1958): 343–50.
5. R.E. Adamson, “Functional Fixedness as Related to Problem Solving: A Repeti- tion of Three Experiments,” Journal of Experimental Psychology (October 1952): 288– 91.
6. Ibid., 288.
7. R.E. Adamson and D.W. Taylor, “Functional Fixedness as Related to Elapsed Time and to Set,” Journal of Experimental Psychology (February 1954): 122–26.
8. S. Glucksberg and J.H. Danks, “Functional Fixedness: Stimulus Equivalence Me- diated by Semantic-Acoustic Similarity,” Journal of Experimental Psychology (July 1967): 400–405; J. Jensen, “On Functional Fixedness: Some Critical Remarks,”
Scandinavian Journal of Psychology(Winter 1960): 157–62. 9. Adamson and Taylor, “Functional Fixedness.” 10. Duncker, “On Problem Solving.”
11. P. Saugstad and K. Raaheim, “Problem Solving, Past Experience and Availability of Functions,” British Journal of Psychology (May 1960): 97–104.
12. A.S. Luchins and E.H. Luchins, “New Experimental Attempts at Presenting Mech- anization in Problem Solving,” in Thinking and Reasoning: Selected Readings, ed. P.C. Watson and P.N. Johnson Laird (Hammondsworth, Eng.: Penguin, 1968), 42–44.
13. Y. Ijiri, R.K. Jaedicke, and K.E. Knight, “The Effects of Accounting Alternatives on Management Decisions,” in Research in Accounting Measurement, ed. R.K. Jaedicke,
Y. Ijiri, and O. Nielsen (Sarasota, FL: American Accounting Association, 1966), 186– 99.
14. Ibid., 194. 15. Ibid., 194.
16. K.E. Knight, “Effect of Effort on Behavioral Rigidity in Luchins’ Water Jar Task,”
Journal of Abnormal and Social Psychology (1960): 192–94; Paul Barnes and John Webb, “Management Information Changes and Functional Fixation: Some Experimental Evidence from the Public Sector,” Accounting, Organizations and Society (February 1986): 1–18.
17. R.H. Ashton, “Cognitive Changes Induced by Accounting Changes: Experimental Evidence on the Functional Fixation Hypothesis,” supplement to Journal of Accounting
Research(1976): 1–17. 18. Ibid., 5. 19. Ibid., 1–7.
20. Robert Libby, “Discussion of Cognitive Changes Induced by Accounting Changes—Experimental Evidence on the Functional Fixation Hypothesis,” supplement to Journal of Accounting Research (1976): 18–24.
21. Ibid., 23.
22. David B. Pearson, “Discussion of Cognitive Changes Induced by Accounting Changes: Experimental Evidence on the Functional Fixation Hypothesis,” supplement to
Journal of Accounting Research(1976): 25–28.
23. R.J. Swieringa, T.R. Dyckman, and R.E. Hoskin, “Empirical Evidence about the Effects of an Accounting Change on Information Processing,” in Behavioral Experiments
in Accounting II, ed. T.J. Burns (Columbus: Ohio State University Press, 1979), 225– 59.
24. T.R. Dyckman, R.E. Hoskin, and R.J. Swieringa, “An Accounting Change and Information Processing Changes,” Accounting, Organizations and Society (February 1982): 1–11.
25. D.L. Chang and J.G. Birnberg, “Functional Fixity in Accounting Research: Per- spective and New Data,” Journal of Accounting Research (Autumn 1977): 300–312.
26. Ibid., 311.
27. R.A. Abdel-Khalik and T.F. Keller, “Earnings or Cash Flows: An Experiment on Functional Fixation and the Valuation of the Firm,” Studies in Accounting Research 16 (Sarasota, FL: American Accounting Association, 1979).
28. Ibid., 17.
29. Robert Bloom, Pieter T. Elgers, and Dennis Murray, “Functional Fixation in Prod- uct Pricing: A Comparison of Individuals and Groups,” Accounting, Organizations and
Society9, no. 1 (1984): 1–11. 30. Ibid., 8.
31. Neil Wilner and Jacob Birnberg, “Methodological Problems in Functional Fixation Research: Criticism and Suggestions,” Accounting, Organizations and Society (February 1986): 74.
32. Robert W. McGee, “Software Accounting, Bank Lending Decisions, and Stock Prices,” Management Accounting (July 1984): 20–23.
33. Ibid., 20.
34. Ahmed Belkaoui, “Accrual Accounting, Modified Cash Basis of Accounting and the Loan Decision: An Experiment in Functional Fixation,” unpublished manuscript, University of Illinois at Chicago, 1988.
35. Robert E. Jensen, “An Experimental Design for the Study of Effects of Accounting Variations in Decision Making,” Journal of Accounting Research (Autumn 1966): 224– 38.
36. J.L. Livingstone, “A Behavioral Study of Tax Allocation in Electric Utility Reg- ulation,” The Accounting Review (July 1967): 544–52.
37. Ibid., 550–51. 38. Ibid., 552.
39. F.A. Mlynarczyk, Jr., “An Empirical Study of Accounting Methods and Stock Prices,” supplement to Journal of Accounting Research (1969): 63–81.
40. W.H. Beaver, “The Behavior of Security Prices and Its Implications for Account- ing Research Methods,” supplement to The Accounting Review (1972): 407–37.
41. Ibid., 420–21.
42. Knight, “Effect of Effort on Behavioral Rigidity”; Barnes and Webb, “Manage- ment Information Changes and Functional Fixation.”
43. Luchins and Luchins, “New Experimental Attempts.”
44. J.A. Schumpeter, Capitalism. Socialism and Democracy, 3d ed. (New York: Har- per & Row, 1950), 123–24.
45. Robert R. Sterling, “On Theory Construction and Verification,” The Accounting
Review(July 1970): 433.
46. L. Revsine, Replacement Cost Accounting (Englewood Cliffs, NJ: Prentice-Hall 1973), 50–51.
47. D. Kahneman and A. Tversky, “Prospect Theory: An Analysis of Decision under Risk,” Econometrika (March 1979): 263–91.
48. Ibid., 265. 49. Ibid., 268. 50. Ibid., 271.
51. R.S. Woodworth and H. Schosberg, Experimental Psychology (New York: Henry Holt, 1954), 733.
52. Ibid.
53. G.E. Muller and F. Schumann, “Experimentelle Beitrage Zur Untersuchung de Gedachtnisses,” Zeitschrift fu¨r Psychologie (1894): 81–190, 257–339.
54. A.C. Catania, Learning (Englewood Cliffs, NJ: Prentice-Hall, 1979).
55. J. Kagan and E. Havemann, Psychology: An Introduction, 3d ed. (New York: Harcourt Brace Jovanovich, 1976), 149.
56. Susan Haka, Lauren Friedman, and Virginia Jones, “Functional Fixation and The- oretical and Empirical Investigation,” The Accounting Review (July 1986): 455–74.
57. Ibid., 460.
58. R.P. Barthol and Nari D. Ku, “Specific Regression under a Nonrelated Stress Situation,” American Psychologist (February 1963): 482.
59. Ahmed Belkaoui, “Learning Order and the Acceptance of Accounting Techniques,
The Accounting Review(October 1975): 897–99. 60. Ibid., 898–99.
61. C. Hovland, I. Jarvis, and H. Kelly, Communication and Persuasion (New Haven, CT: Yale University Press, 1953).
62. F.H. Lund, “The Psychology of Belief: IV. The Law of Primacy in Persuasion,”
Journal of Abnormal and Social Psychology(1925): 236–49; F.H. Kroner, “Experimental Studies of Changes in Attitudes: II. A Study of the Effect of Printed Arguments on Changes in Attitudes,” Social Psychology (1936): 522–32.
63. R. Lana, “Controversy on the Topic and the Order of Presentation in Persuasive Communications,” Psychological Reports (April 1963): 163–70.
64. C.A. Insko, “Primacy versus Recency in Persuasion as a Function of the Timing of Arguments and Measurement,” Journal of Abnormal and Social Psychology (1964): 381–91.
65. Hovland, Jarvis, and Kelly, Communication and Persuasion.
66. David C. Morteson, Communication: The Study of Human Interaction (New York: McGraw-Hill, 1972).
67. Ahmed Belkaoui, “The Primacy-Recency Effect, Ego Involvement and the Ac- ceptance of Accounting Techniques,” The Accounting Review (January 1977): 252–56.
68. Pearson, “Discussion of Cognitive Changes Induced by Accounting Changes.” 69. Barnes and Webb, “Management Information Changes and Functional Fixation.” 70. Luchins and Luchins, “New Experimental Attempts.”
71. Barnes and Webb, “Management Information Changes and Functional Fixation.” 72. Ibid., 12.
73. Flavell, Cooper, and Loisell, “Effect of the Number of Pre-utilization Functions.” 74. Adamson and Taylor, “Functional Fixedness”; Flavell, Cooper, and Loisell, “Ef- fect of the Number of Pre-utilization Functions.”
75. N.A. Wilner and J.G. Birnberg, “A Comparison of the Accounting and Psycho- logical Literature on Functional Fixation,” unpublished working paper, University of Pittsburgh, 1984.
76. N.A. Wilner and J.G. Birnberg, “Methodological Problems in Functional Fixation Research: Criticisms and Suggestions,” Accounting, Organizations and Society (February 1986): 75.
77. Ibid., 75–78. 78. Ibid., 78–79.
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