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Costs of Control in Groups

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  • Gerhard Riener
  • Simon Wiederhold

Abstract

This paper explores the role of social groups in explaining the reaction to control. We propose a simple model with a principal using control devices and a controlled agent, which incorporates the existence of social groups. Testing experimentally the conjectures derived from the model and related literature, we find that agents in social groups (i) perform more than other (no-group) agents; (ii) expect less control than no-group agents; (iii) decrease their performance substantially when actual control exceeds their expectation, while no-group agents do not react; (iv) do not reciprocate when facing less control than expected, while no-group agents do.

Suggested Citation

  • Gerhard Riener & Simon Wiederhold, 2011. "Costs of Control in Groups," ifo Working Paper Series 113, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_113
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    References listed on IDEAS

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    1. Mechtel, Mario & Hett, Florian & Kröll, Markus, 2014. "Endogenous Social Identity and Group Choice," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100307, Verein für Socialpolitik / German Economic Association.

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    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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