This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 96 No. 5 (December 2006)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

The Hidden Costs of Control

Article Citation

Falk, Armin, and Michael Kosfeld. 2006. "The Hidden Costs of Control." American Economic Review, 96(5): 1611-1630.

DOI: 10.1257/aer.96.5.1611

Abstract

We analyze the consequences of control on motivation in an experimental principalagent game, where the principal can control the agent by implementing a minimum performance requirement before the agent chooses a productive activity. Our results show that control entails hidden costs since most agents reduce their performance as a response to the principal’s controlling decision. Overall, the effect of control on the principal’s payoff is nonmonotonic. When asked for their emotional perception of control, most agents who react negatively say that they perceive the controlling decision as a signal of distrust and a limitation of their choice autonomy. (JEL D82, Z13)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (315.42 KB) | Link to Appendix (61.21 KB)

Authors

Falk, Armin
Kosfeld, Michael


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us