Using Construal Level Theory to Motivate Accounting Research: A Literature Review

ABSTRACT This study reviews extant literature on construal level theory (CLT) of psychological distance (Liberman and Trope 1998; Trope and Liberman 2003). According to CLT, the concept of psychological distance constitutes a common meaning shared by four interrelated dimensions: temporal distance, social distance, spatial distance, and hypotheticality. The core premise is that psychological distance is tied to the level of mental construal (i.e., mental representation), such that more distant objects (or situations) are construed at a higher level and higher-level construals evoke thoughts of more distant objects (Trope and Liberman 2010). CLT further suggests that mental construals influence evaluation, prediction, and behavior (Trope, Liberman, and Wakslak 2007). In spite of the fact that CLT is considered a prominent contemporary theory and comprehensive framework for judgment and decision-making, behavioral accounting research, with few exceptions, has largely ignored the theory's predictions and insights. However, as accounting, auditing, and business in general become increasingly global and geographically dispersed, the perspectives provided by CLT should no longer be ignored. This study aims at illustrating CLT's potential for investigating hitherto unexplained phenomena within the accounting domain and argues that CLT provides the potential for a superior understanding of the heuristics and biases in judgment and decision-making that are associated with distance-affected decision environments. The paper reviews the findings reported in 88 articles (and one book chapter) with an emphasis on publications that apply CLT in contexts that are of particular interest to accounting researchers. CLT's underlying theoretical logic, its commonalities, and its differences with related theories and models are explained through a detailed review of the insights gained from basic CLT research. Commonly applied methods associated with experimental manipulations are highlighted, and broad, CLT-based research questions pertaining to various accounting domains are offered.