The Lure of Authority: Motivation and Incentive Effects of Power

University of Zurich, UBS International Center of Economics in Society, Working Paper No. 2

60 Pages Posted: 1 Jun 2016

See all articles by Ernst Fehr

Ernst Fehr

University of Zurich - Department of Economics

Holger Herz

University of Zurich

Tom Wilkening

University of Melbourne

Multiple version iconThere are 4 versions of this paper

Date Written: November 2012

Abstract

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest – suggesting that authority has non-pecuniary consequences for utility. Authority also leads to over-provision of effort by the controlling parties, while a large percentage of subordinates under-provide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

Keywords: Organizational behavior, incentives, experiments and contracts

JEL Classification: C92, D83, D23

Suggested Citation

Fehr, Ernst and Herz, Holger and Wilkening, Tom S., The Lure of Authority: Motivation and Incentive Effects of Power (November 2012). University of Zurich, UBS International Center of Economics in Society, Working Paper No. 2. Available at SSRN: https://ssrn.com/abstract=2786963 or http://dx.doi.org/10.2139/ssrn.2786963

Ernst Fehr (Contact Author)

University of Zurich - Department of Economics ( email )

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Holger Herz

University of Zurich ( email )

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Tom S. Wilkening

University of Melbourne ( email )

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Melbourne, Carlton 3054
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HOME PAGE: http://www.tomwilkening.com

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