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The lure of authority: Motivation and incentive effects of power


Fehr, Ernst; Herz, Holger; Wilkening, Tom (2012). The lure of authority: Motivation and incentive effects of power. UBS Center Working Paper Series 2, University of Zurich : UBS International Center of Economics in Society.

Abstract

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest – suggesting that authority has non-pecuniary consequences for utility. Authority also leads to over-provision of effort by the controlling parties, while a large percentage of subordinates under-provide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest – suggesting that authority has non-pecuniary consequences for utility. Authority also leads to over-provision of effort by the controlling parties, while a large percentage of subordinates under-provide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > UBS International Center of Economics in Society
03 Faculty of Economics > Department of Economics
Working Paper Series > UBS Center Working Paper Series
Dewey Decimal Classification:330 Economics
JEL Classification:C92, D83, D23
Uncontrolled Keywords:Organizational Behavior, Incentives, Experiments and Contracts
Language:English
Date:November 2012
Deposited On:11 Sep 2013 09:56
Last Modified:05 Apr 2016 16:58
Series Name:UBS Center Working Paper Series
Number of Pages:19
ISSN:2296-2751
Official URL:http://www.ubscenter.uzh.ch/assets/workingpapers/WP2_Lure_of_Authority.pdf
Related URLs:http://www.ubscenter.uzh.ch/en/publications/workingpapers
Permanent URL: https://doi.org/10.5167/uzh-80896

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