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The Impact of Management Incentives in Intergroup Contests

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  • Gerald Eisenkopf

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    (Department of Economics, University of Konstanz, Germany)

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    Abstract

    In intergroup contests a manager advises and motivates her group’s members. Her rewards often depend on the subsequent contest expenditure of the members. I test whether such incentives undermine the credibility and effectiveness of a manager’s efforts. In the different experimental treatments the managers either benefit from very high or low expenditure or get a predetermined payment. The results show that different management incentives shape the expenditure of the group members even if managers have an advisory role only. However, group members follow recommendations more closely if management compensation is not linked to contest expenditures.

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    Bibliographic Info

    Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2013-26.

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    Length: 47 pages
    Date of creation: 27 Nov 2013
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    Handle: RePEc:knz:dpteco:1326

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    Related research

    Keywords: Communication; Experiment; Rent-seeking; Management compensation; Group decision making;

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