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Confidence Management: On Interpersonal Comparisons in Teams

Author

Listed:
  • Benoît S.Y. Crutzen

    (Erasmus Universiteit Rotterdam)

  • Otto H. Swank

    (Erasmus Universiteit Rotterdam)

  • Bauke Visser

    (Erasmus Universiteit Rotterdam)

Abstract

This discussion paper resulted in a publication in the Journal of Economics & Management Strategy . Organization differ in the degree to which they differentiate employees by ability. We analyse how the effect of differentiation on employee morale may explain this variation. By comparing employees using ordinary talk, a manager boosts the self-image of some, but hurts that of others. Whether the net effect is positive for the organization depends on the degree of synergy between employees and on the shape of their objective function. An implication for relative performance pay is that it yields a double dividend or constitutes a double-edged sword.

Suggested Citation

  • Benoît S.Y. Crutzen & Otto H. Swank & Bauke Visser, 2007. "Confidence Management: On Interpersonal Comparisons in Teams," Tinbergen Institute Discussion Papers 07-040/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20070040
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Archishman Chakraborty & Rick Harbaugh, 2014. "Persuasive Puffery," Marketing Science, INFORMS, vol. 33(3), pages 382-400, May.
      • Archishman Chakraborty & Rick Harbaugh, 2012. "Persuasive Puffery," Working Papers 2012-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    2. Maria Cotofan, 2019. "Learning from Praise: Evidence from a Field Experiment with Teachers," Tinbergen Institute Discussion Papers 19-082/V, Tinbergen Institute.
    3. Shanglyu Deng & Hanming Fang & Qiang Fu & Zenan Wu, 2020. "Confidence Management in Tournaments," NBER Working Papers 27186, National Bureau of Economic Research, Inc.
    4. Jurjen J. A. Kamphorst & Otto H. Swank, 2016. "Don't Demotivate, Discriminate," American Economic Journal: Microeconomics, American Economic Association, vol. 8(1), pages 140-165, February.
    5. Sémirat, Stéphan, 2019. "Skewed information transmission: The effect of complementarities in a multi-dimensional cheap talk game," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 1-19.
    6. Stéphan Sémirat, 2019. "Skewed information transmission: the effect of complementarities in a multi-dimensional cheap talk game," Post-Print halshs-02068501, HAL.
    7. Stephen Eliot Hansen, 2010. "The Benefits of Limited Feedback in Organizations," Working Papers 490, Barcelona School of Economics.
    8. Jurjen J.A. Kamphorst & Otto H. Swank, 2018. "The role of performance appraisals in motivating employees," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(2), pages 251-269, June.
    9. Cotofan, Maria, 2021. "Learning from praise: Evidence from a field experiment with teachers," Journal of Public Economics, Elsevier, vol. 204(C).
    10. Marino, Anthony M., 2014. "Transparency in agency: The constant elasticity case and extensions," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 9-21.
    11. Philipp Denter & John Morgan & Dana Sisak, 2022. "Showing Off or Laying Low? The Economics of Psych-outs," American Economic Journal: Microeconomics, American Economic Association, vol. 14(1), pages 529-580, February.
    12. Sémirat, S., 2015. "Complementarity exacerbates discrimination," Working Papers 2015-12, Grenoble Applied Economics Laboratory (GAEL).
    13. Sémirat, S., 2016. "Vertical conflict of interest and horizontal inequities," Working Papers 2016-06, Grenoble Applied Economics Laboratory (GAEL).
    14. Stéphan Sémirat, 2019. "Strategic information transmission despite conflict," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 921-956, September.
    15. Kampkötter, Patrick & Sliwka, Dirk, 2011. "Differentiation and Performance: An Empirical Investigation on the Incentive Effects of Bonus Plans," IZA Discussion Papers 6070, Institute of Labor Economics (IZA).
    16. Silvia Dominguez Martinez & Otto H. Swank, 2011. "On the Role of Pre-Determined Rules for HRM Policies," Tinbergen Institute Discussion Papers 11-034/1, Tinbergen Institute.

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    More about this item

    Keywords

    Comparisons; Confidence; Teams; Cheap talk;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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