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Employee Types and Endogenous Organizational Design

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  • Antoni Cunyat

    (University of Valencia)

  • Randolph Sloof

    ()
    (University of Amsterdam)

Abstract

When managers are sufficiently guided by social preferences, incentive provision through an organizational mode based on informal implicit contracts may provide a cost-effective alternative to a more formal mode based on explicit contracts and monitoring. This paper reports the results from a laboratory experiment designed to test whether organizations make full effective use of the available preference types within their work force when drafting their organizational design. Our main finding is that they do not do so; although the importance of social preferences is recognized by those choosing the organizational mode, the significant impact managers' preferences have on the behavior of workers in the organization seems to be overlooked.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 08-019/1.

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Date of creation: 20 Feb 2008
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Handle: RePEc:dgr:uvatin:20080019

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Keywords: Organizational design; social preference types; experiments;

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  10. Ernst Fehr & John A. List, 2004. "THE HIDDEN COSTS AND RETURNS OF INCENTIVES — TRUST AND TRUSTWORTHINESS AMONG CEOs," Labor and Demography 0409012, EconWPA.
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Cited by:
  1. Amedeo Piolatto, 2014. "Itemised deductions: a device to reduce tax evasion," Working Papers 2014/9, Institut d'Economia de Barcelona (IEB).
  2. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 2010. "Trade liberalization in vertically related markets," Working Papers. Serie AD 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Piolatto, Amedeo, 2008. "Tax evasion and deductible expenses," MPRA Paper 10136, University Library of Munich, Germany, revised Jul 2008.
  4. José M. Jiménez Gómez & María del Carmen Marco Gil & Pedro Gadea Blanco, 2010. "Some game-theoretic grounds for meeting people half-way," Working Papers. Serie AD 2010-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Dolores Guilló, María & Papageorgiou, Chris & Perez-Sebastian, Fidel, 2011. "A unified theory of structural change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(9), pages 1393-1404, September.
  6. Empar Pons Blasco & Luisa Escriche Bertolín, 2009. "Who moves up the career ladder? A model of gender differences in job promotion," Working Papers. Serie AD 2009-23, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  7. Aurora Gómez Galvarriato & Cesar Guerrero-Luchtenberg, 2010. "Timing of protectionism," Working Papers. Serie AD 2010-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. Cuberes, David & Dougan, William, 2009. "How Endogenous Is Money? Evidence from a New Microeconomic Estimate," MPRA Paper 17744, University Library of Munich, Germany.
  9. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, Elsevier.
  10. Ramón Faulí-Oller, 2009. "Mergers of retailers with limited selling capacity," Working Papers. Serie AD 2009-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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