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The Impact of Management Incentives in Intergroup Contests

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  • Gerald Eisenkopf
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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 Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 87.

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    Date of creation: 2013
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    Handle: RePEc:twi:respas:0087

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

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