Supervisor’s Reward Power Mitigates Lying in Teammates’ Self-Reports

24 Pages Posted: 25 Jul 2014 Last revised: 12 Feb 2015

See all articles by Özgür Gürerk

Özgür Gürerk

University of Erfurt - Economics, Law, and Social Sciences

Thomas Lauer

University of Cologne

Mark Pigors

University of Cologne

Date Written: February 10, 2015

Abstract

We experimentally investigate the effects of a supervisor’s reward power on teammates’ self-reported effort information and on team performance. When reporting, teammates exaggerate their own efforts, i.e., they lie. However, they do so less if the supervisor has the power to allocate individual payments at her own discretion than when the supervisor is forced to distribute rewards according to an exogenous allocation rule. The exaggerations in self-reports have detrimental effects on team performance; these effects, however, are less pronounced if the supervisor has reward power. The supervisor’s ability to allocate incentive-compatible rewards does not depend on whether she can monitor subordinates’ true efforts or whether she receives self-reports.

Keywords: self-report; effort information; performance payment; lying; team performance; reward power; social dilemmas; experiment

JEL Classification: M5, C91, D23

Suggested Citation

Gürerk, Özgür and Lauer, Thomas and Pigors, Mark, Supervisor’s Reward Power Mitigates Lying in Teammates’ Self-Reports (February 10, 2015). Available at SSRN: https://ssrn.com/abstract=2470627 or http://dx.doi.org/10.2139/ssrn.2470627

Özgür Gürerk (Contact Author)

University of Erfurt - Economics, Law, and Social Sciences ( email )

Nordhaeuser Str. 63
D - 99089 Erfurt
Germany

Thomas Lauer

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Mark Pigors

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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