TY  - GEN
N2  - This study provides evidence from a laboratory experiment showing that managerial bonuses can affect adversely a manager?s subordinates. In our set up, managers compete to obtain a large bonus which depends partly on the effort exerted by their subordinates. Managers can suggest an effort level and coerce subordinates who disobey by punishing them. When managers compete for individual bonuses, we ?nd that subordinates do not obey their demands. This doubles coercion rates relative to a control treatment without bonuses. In contrast, when managers compete for pooled bonuses which give managers discretionary power over the allocation of the bonus, most
subordinates exert maximal effort. Although managers share a substantial fraction of the bonus, they are not worse off than they are with an individual bonus. A model in which agents care about inequality in earnings can account for the main ?ndings in our experiment.
KW  - coercion
KW  -  managerial incentives
KW  -  disobedience
KW  -  hierarchy
KW  -  tournament.
ID  - heidok18580
T3  - Discussion Paper Series, University of Heidelberg, Department of Economics
UR  - https://archiv.ub.uni-heidelberg.de/volltextserver/18580/
AV  - public
CY  - Heidelberg
A1  - Nikiforakis, Nikos 
A1  - Oechssler, Jörg 
A1  -  Shah, Anwar
TI  - Managerial bonuses, subordinates? disobedience, and coercion
Y1  - 2015/03//
EP  - 29
ER  -