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One of the most interesting developments in the theory of Ciscel and Carroll (4) recently explain, considerable debate has raged over the economic assumption that the large corporation, through the decisions of its managers, attempts to maximize its profits. Closely related to the notion of profit maximization is expense preference behavior of managers which would indicate a "preference" for expenses over firm profits. The tension between profit maximization behavior and expense preference behavior of managers has been recently discussed by Lamer (12) One condition which could affect a firm's ability and willingness to engage in expense preference behavior is the market structure in which it operates. This study examines the market structure effects on expense preference behavior and, for the first time, tests are made using data which unambiguously reflect market structure differences.The results provide evidence contrary to the expense preference hypothesis and the findings are quite consistent with the previous research of Ciscel and Carroll (4), Lamer (12), and Rhoades (21).