Why Genius Leads to Adversity: Experimental Evidence on the Reputational Effects of Task Difficulty Choices
We use a behavioral laboratory experiment to study how agents with reputation concerns select the difficulty of their tasks. Drawing upon existing theory, we subjected participants in our study to a context in which they had to convince a principal of their capability to reap financial benefits. Our results show that participants tended to increase the difficulty of their task to enhance their reputation. In addition, we provide evidence that performance rewards reduce a less capable agent's tendency to choose a more difficult task, whereas a highly capable agent's pattern of choices is unaffected by performance rewards. Although the productivity of agents in our experiment therefore decreased if they had to convince a principal of their capability, we show that these detrimental performance implications can to some degree be overcome for less capable agents through performance rewards or by ensuring that the principal can interpret the agent's choice. This paper was accepted by Christoph Loch, R&D and product development.
Volume (Year): 57 (2011)
Issue (Month): 6 (June)
|Contact details of provider:|| Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA|
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:57:y:2011:i:6:p:1042-1054. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If references are entirely missing, you can add them using this form.