Legitimacy of Control
What is the motivational effect of imposing a minimum effort require- ment? Agents may no longer exert voluntary effort but merely meet the requirement. Here, we examine how such hidden costs of control change when control is considered legitimate. We study a principal- agent model where control signals the expectations of the principal and the agent meets these expectations because he is guilt-averse. We conjecture that control is more likely to be considered legitimate (i) if it is not exclusively aimed at a specifc agent or (ii) if it protects the endowment of the principal. Given the conjecture, the model predicts that hidden costs are lower when one of the two conditions is met. We experimentally test these predictions and find them confirmed.
Year of publication: |
2007
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Authors: | Schnedler, Wendelin ; Vadovic, Radovan |
Publisher: |
Heidelberg : University of Heidelberg, Department of Economics |
Subject: | Leistungsbeurteilung | Prinzipal-Agent-Theorie | Moral Hazard | Leistungsmotivation | Theorie | moral-hazard | intrinsic motivation | guilt-aversion |
Saved in:
freely available
Series: | Discussion Paper Series ; 450 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 553818449 [GVK] hdl:10419/127267 [Handle] RePEc:awi:wpaper:0450 [RePEc] |
Classification: | C7 - Game Theory and Bargaining Theory ; C9 - Design of Experiments ; M5 - Personnel Economics |
Source: |
Persistent link: https://www.econbiz.de/10011422159