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Hierarchy, Coercion, and Exploitation : An Experimental Analysis

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  • Nikos Nikiforakis

    (Department of Economics, The University of Melbourne, Victoria 3010, Australia; CNRS, Groupe dAnalyse et de Théorie Economique, 93, Chemin des Mouilles, 69130 Ecully, France; Max Planck Institute for Research on Collective Goods, Kurt Schumacher Strasse 10, 53113 Bonn, Germany)

  • Jörg Oechssler

    (Department of Economics, University of Heidelberg, Bergheimer Str. 58, 69115 Heidelberg, Germany)

  • Anwar Shah

    (School of Economics, Quaid-I-Azam University, 45320 Islamabad, Pakistan)

Abstract

The power to coerce workers is important for the e¢ cient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player interact repeatedly for a finite number of periods. We find that senior players try repeatedly to use their power to exploit junior workers. These attempts are successful only when junior workers have incomplete information about how their e¤ort impacts on the earnings of senior players, but not when they have complete information. Evidence from an incentive-compatible questionnaire indicates that the social acceptability of exploitation depends on whether the junior worker can detect she is being exploited. We also show how a history of exploitation affects future interactions.

Suggested Citation

  • Nikos Nikiforakis & Jörg Oechssler & Anwar Shah, 2014. "Hierarchy, Coercion, and Exploitation : An Experimental Analysis," Working Papers 1434, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
  • Handle: RePEc:gat:wpaper:1434
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Exploitation in the lab
      by chris in Stumbling and Mumbling on 2015-02-20 20:39:21
    2. The origins of misbehaviour
      by chris dillow in Stumbling and Mumbling on 2012-07-04 18:30:43

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    More about this item

    Keywords

    coercion; exploitation; disobedience; hierarchy; social norms;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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