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Costs of Control in Groups

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  • Gerhard Riener
  • Simon Wiederhold

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Abstract

This paper explores the role of social groups in explaining the reaction to control.We propose a simple model with a principal using control devices and a controlledagent, which incorporates the existence of social groups. Testing experimentally theconjectures derived from the model and related literature, we find that agents in socialgroups (i) perform more than other (no-group) agents; (ii) expect less control thanno-group agents; (iii) decrease their performance substantially when actual controlexceeds their expectation, while no-group agents do not react; (iv) do not reciprocatewhen facing less control than expected, while no-group agents do.

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Bibliographic Info

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 113.

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Date of creation: 2011
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Handle: RePEc:ces:ifowps:_113

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  1. Ellingsen, Tore & Johannesson, Magnus, 2006. "Pride and Prejudice: The Human Side of Incentive Theory," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5768, C.E.P.R. Discussion Papers.
  2. Wendelin Schnedler & Radovan Vadovic, 2007. "Legitimacy of Control," Working Papers, University of Heidelberg, Department of Economics 0450, University of Heidelberg, Department of Economics, revised Aug 2007.
  3. David Dickinson & Marie-Claire Villeval, 2004. "Does Monitoring Decrease Work Effort ? The Complementarity Between Agency and Crowding-Out Theorie," Post-Print, HAL halshs-00180112, HAL.
  4. Charness, Gary & Frechette, Guillaume R & Kagel, John H, 2002. "How Robust is Laboratory Gift Exchange?," University of California at Santa Barbara, Economics Working Paper Series qt8qq4k3ph, Department of Economics, UC Santa Barbara.
  5. Charness, Gary & Rabin, Matthew, 2001. "Understanding Social Preferences with Simple Tests," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt4qz9k8vg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  6. Dohmen Thomas & Falk Armin, 2010. "You get what you pay for: Incentives and Selection in the Education System," ROA Research Memorandum, Maastricht University, Research Centre for Education and the Labour Market (ROA) 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  7. Sliwka, Dirk, 2006. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," IZA Discussion Papers 2293, Institute for the Study of Labor (IZA).
  8. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  9. Shaun P. Hargreaves Heap & Daniel John Zizzo, 2009. "The Value of Groups," American Economic Review, American Economic Association, American Economic Association, vol. 99(1), pages 295-323, March.
  10. Ferdinand von Siemens, 2011. "Intention-Based Reciprocity and the Hidden Costs of Control," CESifo Working Paper Series 3553, CESifo Group Munich.
  11. Dufwenberg, Martin & Muren, Astri, 2006. "Generosity, anonymity, gender," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 61(1), pages 42-49, September.
  12. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  13. repec:dgr:uvatin:2011115 is not listed on IDEAS
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