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Intention-based reciprocity and the hidden costs of control

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  • von Siemens, Ferdinand A.

Abstract

Empirical research suggests that – despite strengthening conventional incentives to put in effort – exerting control might reduce worker performance. The present paper shows that intention-based reciprocity can explain such hidden costs of control if individuals differ in their propensity for reciprocity and preferences are private information. Not being controlled might then be considered to be kind, because not everybody reciprocates not being controlled with high effort. This argument contrasts existing theoretical wisdom on the hidden costs of control that is almost exclusively based on signaling.

Suggested Citation

  • von Siemens, Ferdinand A., 2013. "Intention-based reciprocity and the hidden costs of control," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 55-65.
  • Handle: RePEc:eee:jeborg:v:92:y:2013:i:c:p:55-65
    DOI: 10.1016/j.jebo.2013.04.017
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    More about this item

    Keywords

    Intention-based reciprocity; Incomplete information; Hidden costs of control;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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