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Procedural Fairness and the Cost of Control

Author

Listed:
  • Judd B. Kessler
  • Stephen Leider

Abstract

A large and growing literature has demonstrated that imposing control on agents has the potential to backfire, leading agents to withhold effort. Consistent with principles of procedural fairness, we find that the way in which control is imposed—in particular whether control is imposed symmetrically on both principals and agents and whether both parties have a say in whether control is imposed—affects how agents respond to control. In our setting, control leads agents to withhold effort only when procedural fairness concerns are ignored and control is imposed unilaterally with an asymmetric effect on the agent. (JEL C7, C9, L2, M5)

Suggested Citation

  • Judd B. Kessler & Stephen Leider, 2016. "Procedural Fairness and the Cost of Control," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(4), pages 685-718.
    • Handle: RePEc:oup:jleorg:v:32:y:2016:i:4:p:685-718.
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    File URL: http://hdl.handle.net/10.1093/jleo/eww009
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    Citations

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    Cited by:

    1. Holger Herz & Christian Zihlmann, 2021. "Adverse Effects of Contol: Evidence from a Field Experiment," CESifo Working Paper Series 8890, CESifo.
    2. Gallus, Jana & Reiff, Joseph & Kamenica, Emir & Fiske, Alan Page, 2021. "Relational Incentives Theory," MPRA Paper 109898, University Library of Munich, Germany.
    3. Kosfeld, Michael, 2019. "The Role of Leaders in Inducing and Maintaining Cooperation: The CC Strategy," IZA Discussion Papers 12540, Institute of Labor Economics (IZA).
    4. Katrin Schmelz & Anthony Ziegelmeyer, 2020. "Reactions to (the absence of) control and workplace arrangements: experimental evidence from the internet and the laboratory," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 933-960, December.
    5. Putu Yudha Asteria Putri & Iwan Triyuwono & Bambang Hariadi & Lilik Purwanti, 2024. "Deconstruction of Management Control Systems and the Role of Culture in Traditional Banking Institutions," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 25-41.
    6. Lindokuhle Njozela & Justine Burns & Arnim Langer, 2018. "The Effects of Social Exclusion and Group Heterogeneity on the Provision of Public Goods," Games, MDPI, vol. 9(3), pages 1-21, August.
    7. Gallus, Jana & Reiff, Joseph & Kamenica, Emir & Fiske, Alan Page, 2021. "Relational Incentives Theory," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue fothcomin.
    8. Mendoza, Juan P. & Wielhouwer, Jacco L. & Kirchler, Erich, 2017. "The backfiring effect of auditing on tax compliance," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 284-294.
    9. Holger Herz & Christian Zihlmann, 2024. "Adverse effects of control? Evidence from a field experiment," Experimental Economics, Springer;Economic Science Association, vol. 27(2), pages 469-488, April.
    10. Ackfeld, Viola & Ockenfels, Axel, 2021. "Do people intervene to make others behave prosocially?," Games and Economic Behavior, Elsevier, vol. 128(C), pages 58-72.
    11. Daniele Nosenzo & Erte Xiao & Nina Xue, 2024. "The motive matters: Experimental evidence on the expressive function of punishment," Monash Economics Working Papers 2024-09, Monash University, Department of Economics.
    12. Judd B. Kessler & Katherine L. Milkman & C. Yiwei Zhang, 2019. "Getting the Rich and Powerful to Give," Management Science, INFORMS, vol. 65(9), pages 4049-4062, September.

    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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