American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Lure of Authority: Motivation and Incentive Effects of Power
American Economic Review
vol. 103,
no. 4, June 2013
(pp. 1325–59)
Abstract
Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest—suggesting that authority has nonpecuniary consequences for utility. Authority also leads to overprovision of effort by the controlling parties, while a large percentage of subordinates underprovide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.Citation
Fehr, Ernst, Holger Herz, and Tom Wilkening. 2013. "The Lure of Authority: Motivation and Incentive Effects of Power." American Economic Review 103 (4): 1325–59. DOI: 10.1257/aer.103.4.1325Additional Materials
JEL Classification
- C92 Design of Experiments: Laboratory, Group Behavior
- D23 Organizational Behavior; Transaction Costs; Property Rights
- D82 Asymmetric and Private Information; Mechanism Design