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The impact of management incentives in intergroup contests

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  • Eisenkopf, Gerald

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.

Suggested Citation

  • Eisenkopf, Gerald, 2014. "The impact of management incentives in intergroup contests," European Economic Review, Elsevier, vol. 67(C), pages 42-61.
  • Handle: RePEc:eee:eecrev:v:67:y:2014:i:c:p:42-61
    DOI: 10.1016/j.euroecorev.2014.01.003
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    Cited by:

    1. Sheremeta, Roman, 2015. "Behavior in Group Contests: A Review of Experimental Research," MPRA Paper 67515, University Library of Munich, Germany.
    2. Eisenkopf, Gerald, 2016. "Communication and Conflict Management," Annual Conference 2016 (Augsburg): Demographic Change 145634, Verein für Socialpolitik / German Economic Association.
    3. Gerald Eisenkopf, 2015. "Communication and conflict management," Working Paper Series of the Department of Economics, University of Konstanz 2015-21, Department of Economics, University of Konstanz.
    4. repec:eee:joepsy:v:63:y:2017:i:c:p:143-167 is not listed on IDEAS
    5. Karol Kempa & Hannes Rusch, 2016. "Misconduct and Leader Behaviour in Contests – New Evidence from European Football," MAGKS Papers on Economics 201629, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

    More about this item

    Keywords

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

    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; Revolutions
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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