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An experimental study into the influence of works council advice on managerial decision-making

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  • Sapulete, Saraï
  • van Witteloostuijn, Arjen
  • Kaufmann, Wesley

Abstract

This paper experimentally studies the effect of works council advice on managerial decision-making, aiming to gain more insights into the fundamental mechanisms that may underlie the impact of works council advice. We conducted laboratory experiments in which subjects played a two-player Prisoner's Dilemma price-setting game as either a manager or works council representative. Half of the managers received an advice to opt for a low or a high price; the other half received no advice. Managers receiving advice to choose a low price (play Nash) have a higher tendency to choose a low price. Subjects with an other-regarding orientation tend to choose a high price. Furthermore, we found an interaction effect of advice for other-regarding managers.

Suggested Citation

  • Sapulete, Saraï & van Witteloostuijn, Arjen & Kaufmann, Wesley, 2014. "An experimental study into the influence of works council advice on managerial decision-making," Scandinavian Journal of Management, Elsevier, vol. 30(3), pages 358-371.
    • Handle: RePEc:eee:scaman:v:30:y:2014:i:3:p:358-371
    DOI: 10.1016/j.scaman.2014.03.001
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