Hidden Costs of Control:Three Repetitions and an Extension

We report three repetitions of Falk and Kosfeld's (2006) low and medium control treatmentswith 364 subjects. Each repetition employs a sample drawn from a standard subject pool ofstudents and demographics vary across samples. Our results largely conict with those of theoriginal study. We mainly observe hidden costs of control of low magnitude that lead to low-trustprincipal-agent relationships. Our subjects were asked, at the end of the experimental session,to complete a questionnaire in which they had to state their work motivation in hypotheticalscenarios. Our questionnaires are identical to the ones administered in Falk and Kosfeld's (2006)questionnaire study. In contrast to the game play data, our questionnaire data are similar to thoseof the original questionnaire study. In an attempt to solve this puzzle, we report an extension with228 subjects where performance-contingent earnings are absent i.e. both principals and agentsare paid according to a at participation fee.[...]