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Query: faculty: "FEB" and publication year: "2011"

AuthorsA. Cunat, R. Sloof
TitleEmployee types and endogenous organizational design: an experiment
JournalJournal of Economic Behavior & Organization
Volume80
Year2011
Issue3
Pages553-573
ISSN01672681
FacultyFaculty of Economics and Business
Institute/dept.FEB: Amsterdam School of Economics Research Institute (ASE-RI)
AbstractWhen managers are sufficiently guided by social preferences, incentive provision through an organizational mode based on informal implicit contracts may provide a cost-effective alternative to a more formal mode based on explicit contracts and active monitoring. This paper reports the results from a stylized laboratory experiment designed to test whether subjects in the role of firm owner rely on the social preferences of other (‘employee’) subjects with whom they are matched when choosing which payoff version of a simple trust game these employee subjects should play (‘the organizational mode’). Our main finding is that they do so, albeit in a different way than theory predicts. The importance of the first mover’s social preferences for trusting behavior is recognized by the owner subjects, but the significant (first order) impact second movers’ social preferences have on trusting behavior of first movers seems to be overlooked.
Document typeArticle
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