The Impact of Management Incentives in Intergroup Contests

Gerald Eisenkopf ()
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Gerald Eisenkopf: Department of Economics, University of Konstanz, Germany

No 2013-26, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

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)
Pages: 47 pages
Date: 2013-11-27
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