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http://hdl.handle.net/10419/62419
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| Title: | | Incentives and group identity  |
| Authors: | | Masella, Paolo Meier, Stephan Zahn, Philipp |
| Issue Date: | | 2012 |
| Series/Report no.: | | Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6815 |
| Abstract: | | This paper investigates in a principal-agent environment whether and how group membership influences the effectiveness of incentives and when incentives can have hidden costs, i.e., a detrimental effect. We show experimentally that in all interactions control mechanisms can have hidden costs for reasons specific to group membership. In within-group interactions control has detrimental effects because the agent does not expect to be controlled and reacts negatively when being controlled. In between-group interactions, agents perceive control more hostile once we condition on their beliefs about principal's behavior. Our finding contributes to the micro-foundation of psychological effects of incentives. |
| Subjects: | | social identity social preferences incentives motivation crowding out trust experiment |
| JEL: | | C91 D03 Z13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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