The Impact of Leadership Incentives in Intergroup Contests
AbstractThe heterogeneous effort supply in intergroup contests explains why groups have a manager. However, the objectives of group managers and members often differ. Using data from an experiment this paper studies whether this conflict of interests affects leadership effectiveness. The managers have an advisory role only and cannot change the monetary incentives of the group members in any context. Depending on the treatment some managers prefer more competition than the group members, some less, and some do not have any incentive at all. The results show that managers can coordinate their groups rather effectively. Their incentives shape the competitive behavior of the 'subordinates'. However group members follow the non-binding investment recommendations of their group manager more closely if management compensation is not incentivized.
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Bibliographic InfoPaper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2013-06.
Length: 35 pages
Date of creation: 26 Mar 2013
Date of revision:
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-06 (All new papers)
- NEP-CDM-2013-04-06 (Collective Decision-Making)
- NEP-EXP-2013-04-06 (Experimental Economics)
- NEP-GTH-2013-04-06 (Game Theory)
- NEP-HRM-2013-04-06 (Human Capital & Human Resource Management)
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