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The Lure of Authority: Motivation and Incentive E ects of Power

Ernst Fehr, Holger Herz and Tom Wilkening

No 1115, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: Authority and power permeate political, social, and economic life but there is limited empirical knowledge about the motivational origins and consequences of authority. We experimentally study the motivation and incentive eff ects of authority in an authority-delegation game. Individuals exhibit a strong tendency to retain authority even when its delegation is in their material interest | suggesting that they value authority per se. Moreover, this tendency to hold on to authority strongly increases with individuals' degree of loss aversion, suggesting an endowment e ect with regard to au- thority. Authority also leads to a substantial over provision of e ort by the controlling party, while a large percentage of subordinates under provide e ort despite pecuniary incentives to the contrary. Thus, authority has important motivational consequences that exacerbate the inefeciencies arising from suboptimal delegation choices.

Keywords: Organizational Behavior; Incentives; Experiments; Contracts (search for similar items in EconPapers)
JEL-codes: C92 D23 D83 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: The Lure of Authority: Motivation and Incentive Effects of Power (2013) Downloads
Working Paper: The Lure of Authority: Motivation and Incentive Effects of Power (2012) Downloads
Working Paper: The Lure of Authority: Motivation and Incentive Effects of Power (2012) Downloads
Working Paper: The lure of authority: Motivation and incentive effects of power (2012) Downloads
Working Paper: The lure of authority: Motivation and incentive effects of power (2012) Downloads
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