Experiments on Employee and Group Behavior

Paper Session

Friday, Jan. 6, 2017 8:00 AM – 10:00 AM

Sheraton Grand Chicago, Missouri
Hosted By: Economic Science Association & American Economic Association
  • Chair: Timothy C. Salmon, Southern Methodist University

Motivating Whistleblowers

Jeffrey Butler
,
Louisiana State University
Danila Serra
,
Southern Methodist University
Giancarlo Spagnolo
,
University of Rome Tor Vergata

Abstract

We experimentally investigate employees’ decisions to blow the whistle against their manager, if they acquire information on the manager’s law-breaking activities that benefited the firm but harmed society. We test the effect of financial rewards and public scrutiny on whistleblowing, and we ask whether employees’ responsiveness to both incentives depends on whether the social damages caused by the manager’s illegal behavior are visible to the general public. Our results suggest that 1) financial rewards ubiquitously increase the likelihood of whistleblowing, 2) public scrutiny increases (decreases) whistleblowing when the negative externalities generated by fraud are visible (invisible) to the public, and 3) political orientation significantly affects responsiveness to public scrutiny.

The Unrealized Value of Centralization for Coordination

Eva Ranehill
,
University of Zurich
Frederic Schneider
,
University of Zurich
Roberto A. Weber
,
University of Zurich

Abstract

Centralization and hierarchy can often facilitate efficient coordination. We develop a coordination game in which efficiency obtains easily if subjects adopt a centralized strategy, whereby every player learns a convention from a central player. We then study the extent to which groups adopt this strategy. We find that subjects rarely rely on centralization and hierarchy, even when we make it very easy to do so. However, we also show that, once this strategy is described briefly, groups easily implement it. In a further experiment, we show that even experienced managers fail to identify and implement the benefits of centralization. Our findings suggest that even where the benefits of centralization for efficient coordination are substantial, people's unawareness of such benefits may mean they go unrealized.

The Effects of Different Cognitive Distractions on Economic Decisions

Cary Deck
,
University of Arkansas and Chapman University
Salar Jahedi
,
Amazon
Roman Sheremeta
,
Case Western Reserve University

Abstract

Imposing cognitive load deteriorates economic decision making. This paper compares the impact of four commonly used cognitive load tasks on decision making: a memorization task, a visual task, an auditory task, and time pressure. In a within-subject design, subjects complete a series of risk taking decisions, allocation decisions, pattern recognition, and math problems under each form of cognitive load. The results provide insight on the differences that do/don’t arise across various methods and have implications for understanding the impact that multitasking can have across many employment settings.

Should You Offer to Pay Your Employees to Quit?

Glenn Dutcher
,
Ohio University
Timothy C. Salmon
,
Southern Methodist University

Abstract

Amazon uses a practice contrary to the conventional wisdom of human resources practices by offering a bonus to employees who quit their jobs during a specified time each year. Conventional expectation would suggest that this would induce Amazon’s best employees with the highest outside options to quit. We investigate the wisdom of this practice by determining whether it might have an alternative effect of the decision to stay in the firm serving as a signal of willingness to coordinate on high effort. Our findings suggest that this policy can serve as a way for an employer to facilitate improved coordination.
Discussant(s)
Sandra Maximiano
,
Purdue University
Tanya Rosenblat
,
University of Michigan
Daniel Fragiadakis
,
Texas A&M University
Sera Linardi
,
University of Pittsburgh
JEL Classifications
  • C9 - Design of Experiments
  • D7 - Analysis of Collective Decision-Making