Economics at your fingertips  

The advantage of hierarchy: Inducing responsibility and selecting ability?

Philipp E. Otto and Friedel Bolle

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2016, vol. 65, issue C, 49-57

Abstract: We theoretically and experimentally investigate team production with and without a leading member of the team (called allocator) who has discretion over the input of all team members including herself. In a further extension of the allocator game, a superior (called principal) is introduced who is interested in high production and who can exchange the allocator. Team production and remuneration are modeled as a linear public good game with a finite number of periods. The main results are that (a) the appointment of a random allocator improves production so that average incomes of all workers, including the allocator, are higher when compared with voluntary contributions, (b) the introduction of a principal further improves production as well as satisfaction and fairness ratings. (a) and (b) describe the advantage of a tiered hierarchy. We provide a formal model of hierarchical decisions as well as derive and test various behavioral hypotheses.

Keywords: Public good experiments; Hierarchical delegation; Principal-agent models; Team production (search for similar items in EconPapers)
JEL-codes: J40 L11 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Ofer Azar

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-12-13
Handle: RePEc:eee:soceco:v:65:y:2016:i:c:p:49-57