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The impact of management incentives in intergroup contests

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  • Eisenkopf, Gerald
Abstract
In intergroup contests a manager advises and motivates her group’s members. Her rewards often depend on the subsequent contest expenditure of the members. I test whether such incentives undermine the credibility and effectiveness of a manager’s efforts. In the different experimental treatments the managers either benefit from very high or low expenditure or get a predetermined payment. The results show that different management incentives shape the expenditure of the group members even if managers have an advisory role only. However, group members follow recommendations more closely if management compensation is not linked to contest expenditures.

Suggested Citation

  • Eisenkopf, Gerald, 2014. "The impact of management incentives in intergroup contests," European Economic Review, Elsevier, vol. 67(C), pages 42-61.
    • Handle: RePEc:eee:eecrev:v:67:y:2014:i:c:p:42-61
    DOI: 10.1016/j.euroecorev.2014.01.003
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    Cited by:

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    2. Francesco Fallucchi & Enrique Fatas & Felix Kölle & Ori Weisel, 2021. "Not all group members are created equal: heterogeneous abilities in inter-group contests," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 669-697, June.
    3. Kölle, Felix, 2020. "Governance and Group Conflict," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224515, Verein für Socialpolitik / German Economic Association.
    4. Karol Kempa & Hannes Rusch, 2019. "Dissent, sabotage, and leader behaviour in contests: Evidence from European football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(5), pages 500-514, July.
    5. Loerakker, Ben & van Winden, Frans, 2017. "Emotional Leadership in an Intergroup Conflict Game Experiment," Journal of Economic Psychology, Elsevier, vol. 63(C), pages 143-167.
    6. Song, Jian & Houser, Daniel, 2021. "Non-exclusive group contests: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 87(C).
    7. Roman M. Sheremeta, 2018. "Behavior In Group Contests: A Review Of Experimental Research," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 683-704, July.
    8. Subhasish M. Chowdhury & Anwesha Mukherjee & Roman M. Sheremeta, 2021. "In-group versus Out-group Preferences in Intergroup Conflict: An Experiment," Working Papers 21-02, Chapman University, Economic Science Institute.
    9. Martin Brown & Jan Schmitz & Christian Zehnder, 2018. "Communication, Credit Provision and Loan Repayment: Evidence from a Person-to-Person Lending Experiment," Working Papers on Finance 1819, University of St. Gallen, School of Finance, revised Aug 2020.
    10. Hubert János Kiss & Alfonso Rosa-Garcia & Vita Zhukova, 2023. "Group contest in a coopetitive setup: experimental evidence," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 463-490, July.
    11. Kölle, Felix, 2022. "Governance and competition," European Economic Review, Elsevier, vol. 148(C).
    12. Eisenkopf, Gerald, 2016. "Communication and Conflict Management," VfS Annual Conference 2016 (Augsburg): Demographic Change 145634, Verein für Socialpolitik / German Economic Association.
    13. Gerald Eisenkopf, 2015. "Communication and conflict management," Working Paper Series of the Department of Economics, University of Konstanz 2015-21, Department of Economics, University of Konstanz.
    14. Hubert J. Kiss & Alfonso Rosa-Garcia & Vita Zhukova, 2019. "Coopetition in group contest," CERS-IE WORKING PAPERS 1911, Institute of Economics, Centre for Economic and Regional Studies.
    15. Eisenkopf, Gerald, 2018. "The long-run effects of communication as a conflict resolution mechanism," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 121-136.
    16. Eisenkopf, Gerald, 2019. "Partisan lobbyists in conflicts," European Journal of Political Economy, Elsevier, vol. 60(C).
    17. Karol Kempa & Hannes Rusch, 2016. "Misconduct and Leader Behaviour in Contests – New Evidence from European Football," MAGKS Papers on Economics 201629, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Communication; Experiment; Rent-seeking; Management compensation; Group decision making;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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