When Supervisors Start to Meddle: An Experiment on the Determinants of Intervention

In large companies, supervisors are hired to control their subordinates’ performance and intervene with risky decisions in order to increase productivity. However, their decision to intervene may not always be profit-orientated. This paper studies whether the decision to intervene in a worker’s decision is influenced by psychological factors that are unrelated to the profitability of intervention. In particular, we examine the role of incidental moods and the anticipation of regret triggered by ex-post evaluation of the decision. Intervention behavior is analyzed in a factorial design controlling for two mood conditions (positive, negative) and the presence or absence of feedback on either the efficiency of intervention or on its social (dis)approval by the supervised worker. We observe that supervisors in the negative mood condition intervene less often (approx. 13%) than those in the positive mood condition. Further, when supervisors are later evaluated, they intervene less (approx. 16%). Our observations are consistent with the idea that supervisors’ decision are not only driven by payoff but also by incidental moods and regret anticipation. The effects, however, are not statistically significant.