eprintid: 18580
rev_number: 29
eprint_status: archive
userid: 2744
dir: disk0/00/01/85/80
datestamp: 2015-04-14 08:13:38
lastmod: 2016-01-18 07:59:57
status_changed: 2015-04-14 08:13:38
type: workingPaper
metadata_visibility: show
creators_name: Nikiforakis, Nikos 
creators_name: Oechssler, Jörg 
creators_name:  Shah, Anwar
title: Managerial bonuses, subordinates’ disobedience, and coercion
subjects: 330
divisions: 181000
keywords: coercion, managerial incentives, disobedience, hierarchy, tournament.
abstract: 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 find 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 findings in our experiment.
date: 2015-03
id_scheme: DOI
id_number: 10.11588/heidok.00018580
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0589
ppn_swb: 1656142848
own_urn: urn:nbn:de:bsz:16-heidok-185802
language: eng
bibsort: NIKIFORAKIMANAGERIAL201503
full_text_status: public
series: Discussion Paper Series, University of Heidelberg, Department of Economics
volume: 0589
place_of_pub: Heidelberg
pages: 29
citation:   Nikiforakis, Nikos  ; Oechssler, Jörg  ;  Shah, Anwar  (2015) Managerial bonuses, subordinates’ disobedience, and coercion.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/18580/1/Nikoforakis%20Oechssler%20Shah_2015_dp589.pdf