Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114130
Authors: 
Burdín, Gabriel
Halliday, Simon
Landini, Fabio
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9251
Abstract: 
This paper studies the role of autonomy and reciprocity in explaining control averse responses in principal-agents interactions. While most of the social psychology literature emphasizes the role of autonomy, recent economic research has provided an alternative explanation based on reciprocity. We propose a simple model and an experiment to test the relative strength of these two motives. We compare two treatments: one in which control is exerted directly by the principal (second-party control); and the other in which it is exerted by a third party enjoying no residual claimancy rights (third-party control). If control aversion is driven mainly by autonomy, then it should persist in the third-party treatment. Our results, however, suggest that this is not the case. Moreover, when a third party instead of the principal exerts control, control results in a greater expected profit for the principal. The implications of these results for organizational design are discussed.
Subjects: 
third party
second party
control aversion
autonomy
principal-agent game
social preferences
trust
reciprocity
JEL: 
C72
C91
D23
M54
Document Type: 
Working Paper

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