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Intention-Based Reciprocity and the Hidden Costs of Control

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  • Ferdinand von Siemens

    (University of Amsterdam)

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    Abstract

    Empirical research suggests that - rather than improving incentives - exerting controlcan reduce workers' performance by eroding motivation. The present paper shows thatintention-based reciprocity can cause such motivational crowding-out if individuals differin their propensity for reciprocity and preferences are private information. Not beingcontrolled might then be considered to be kind, because not everybody reciprocates notbeing controlled with high effort. This argument stands in contrast to existing theoreticalwisdom on motivational crowding-out that is primarily based on signaling models.

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    Bibliographic Info

    Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-115/1.

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    Date of creation: 09 Aug 2011
    Date of revision:
    Handle: RePEc:dgr:uvatin:20110115

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    Web page: http://www.tinbergen.nl

    Related research

    Keywords: extrinsic and intrinsic motivation; crowding-out; intention-based reciprocity;

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    1. Doruk İriş & Luís Santos-Pinto, 2013. "Tacit Collusion under Fairness and Reciprocity," Games, MDPI, Open Access Journal, MDPI, Open Access Journal, vol. 4(1), pages 50-65, February.
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    3. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, Elsevier, vol. 54(2), pages 293-315, February.
    4. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
    5. 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.
    6. 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.
    7. Silvia Dominguez Martinez & Randolph Sloof & Ferdinand von Siemens, 2010. "Monitoring your Friends, not your Foes: Strategic Ignorance and the Delegation of Real Authority," Tinbergen Institute Discussion Papers, Tinbergen Institute 10-101/1, Tinbergen Institute.
    8. Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
    9. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, American Economic Association, vol. 96(5), pages 1611-1630, December.
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    12. Suvorov, Anton & van de Ven, Jeroen, 2009. "Discretionary rewards as a feedback mechanism," Games and Economic Behavior, Elsevier, Elsevier, vol. 67(2), pages 665-681, November.
    13. 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).
    14. Florian Englmaier & Stephen G. Leider, 2008. "Contractual and Organizational Structurewith Reciprocal Agents," CESifo Working Paper Series 2415, CESifo Group Munich.
    15. Barkema, Harry G, 1995. "Do Top Managers Work Harder When They Are Monitored?," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 48(1), pages 19-42.
    16. Herold, Florian, 2010. "Contractual incompleteness as a signal of trust," Games and Economic Behavior, Elsevier, Elsevier, vol. 68(1), pages 180-191, January.
    17. von Siemens, Ferdinand A., 2009. "Bargaining under incomplete information, fairness, and the hold-up problem," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 71(2), pages 486-494, August.
    18. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    19. Nicolai J. Foss, 2001. "Selective Intervention and Internal HybridsInterpreting and Learning from the Rise and Decline of the Oticon Spaghetti Organization," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 01-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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    Cited by:
    1. Masella, Paolo & Meier, Stephan & Zahn, Philipp, 2014. "Incentives and group identity," Games and Economic Behavior, Elsevier, Elsevier, vol. 86(C), pages 12-25.
    2. Wiederhold, Simon & Riener, Gerhard, 2012. "Hidden Costs of Control in Social Groups," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65407, Verein für Socialpolitik / German Economic Association.

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