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Hierarchy, coercion, and exploitation: An experimental analysis

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  • Nikos Nikiforakis

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Jörg Oechssler

    (Faculty of Economics and Social Sciences, University of Heidelberg - Universität Heidelberg [Heidelberg])

  • Anwar Shah

    (Quaid-i-Azam University Islamabad)

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," Post-Print halshs-01098753, HAL.
  • Handle: RePEc:hal:journl:halshs-01098753
    DOI: 10.1016/j.jebo.2013.06.008
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01098753
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    1. repec:eee:jeborg:v:147:y:2018:i:c:p:1-12 is not listed on IDEAS
    2. D'Adda, Giovanna & Drouvelis, Michalis & Nosenzo, Daniele, 2016. "Norm elicitation in within-subject designs: Testing for order effects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 62(C), pages 1-7.
    3. Burdín, Gabriel & Halliday, Simon & Landini, Fabio, 2015. "Third-Party vs. Second-Party Control: Disentangling the Role of Autonomy and Reciprocity," IZA Discussion Papers 9251, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    social norms; hierarchy; coercion; exploitation; disobedience;

    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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