The impact of management incentives in intergroup contests

Gerald Eisenkopf

European Economic Review, 2014, vol. 67, issue C, 42-61

Abstract: In intergroup contests a manager advises and motivates her group’s members. Her rewards often depend on the subsequent contest expenditure of the members. I test whether such incentives undermine the credibility and effectiveness of a manager’s efforts. In the different experimental treatments the managers either benefit from very high or low expenditure or get a predetermined payment. The results show that different management incentives shape the expenditure of the group members even if managers have an advisory role only. However, group members follow recommendations more closely if management compensation is not linked to contest expenditures.

Keywords: Communication; Experiment; Rent-seeking; Management compensation; Group decision making (search for similar items in EconPapers)
JEL-codes: C72 C92 D72 D74 M12 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:67:y:2014:i:c:p:42-61

DOI: 10.1016/j.euroecorev.2014.01.003

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