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The Lure of authority: motivation and incentive effects of power


Fehr, Ernst; Herz, Holger; Wilkening, Tom (2013). The Lure of authority: motivation and incentive effects of power. American Economic Review, 103(4):1325-1359.

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 nonpecuniary consequences for utility. Authority also leads to overprovision of effort by the controlling parties, while a large percentage of subordinates underprovide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

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 nonpecuniary consequences for utility. Authority also leads to overprovision of effort by the controlling parties, while a large percentage of subordinates underprovide 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:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:June 2013
Deposited On:27 Nov 2012 14:03
Last Modified:07 Dec 2017 14:42
Publisher:American Economic Association
ISSN:0002-8282
Free access at:Related URL. An embargo period may apply.
Publisher DOI:https://doi.org/10.1257/aer.103.4.1325
Related URLs:http://isites.harvard.edu/fs/docs/icb.topic457678.files//FEHR_Lure%20of%20Authority.pdf

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