Hierarchy, Coercion, and Exploitation: An Experimental Analysis

Nikos Nikiforakis (), Jörg Oechssler and Anwar Shah ()

No 1434, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

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.

Keywords: coercion; exploitation; disobedience; hierarchy; social norms (search for similar items in EconPapers)
JEL-codes: C72 C91 D74 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth and nep-hme
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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ftp://ftp.gate.cnrs.fr/RePEc/2014/1434.pdf (application/pdf)

Related works:
Journal Article: Hierarchy, coercion, and exploitation: An experimental analysis (2014)
Working Paper: Hierarchy, coercion, and exploitation: An experimental analysis (2014)
Working Paper: Hierarchy, Coercion, and Exploitation: An Experimental Analysis (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:gat:wpaper:1434

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