Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 33

Accounting problems at Enron ultimately led to the collapse of the large accounting firm Arthur Andersen. When the Enron scandal first became public, Andersen's top management blamed one "rouge partner" in the Houston office who they claimed was less honest than other partners at the firm. They fired the partner and asked that people not hold the remaining partners accountable for "one bad apple." What model of behavior was Andersen's management using when it analyzed the source of the problem According to the economic view of behavior, what was the more likely cause of the problem