The hidden costs of control revisited: Should a sanctioning policy be announced in advance?
| Autor: | Charlotte Klempt, Kerstin Pull |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Actuarial science
Strategy and Management 05 social sciences Principal (computer security) Control (management) Principal–agent problem Management Science and Operations Research Crowding out Compliance (psychology) Microeconomics Incentive Management of Technology and Innovation 0502 economics and business Economics Sanctions Intrinsic motivation 050206 economic theory 050207 economics Business and International Management |
| Zdroj: | Managerial and Decision Economics. 39:158-170 |
| ISSN: | 0143-6570 |
| Popis: | Sanctions are widely used to enhance compliance in principal agent relationships. Although there is ample evidence confirming the predicted positive incentive effect of sanctions, it has also been shown that imposing sanctions may reduce compliance by crowding out intrinsic motivation. We add to the literature on the hidden costs of control by showing that these costs are restricted to situations where the principal actively chooses to sanction low performance and where this choice is known to the agent. In such a situation, the principal's commitment to sanction low performance might indicate that she or he is a distrustful “type†and hence conveys a negative signal. To the contrary, if (a) an agent is not informed about whether low performance will be sanctioned or if (b) the computer determines whether low performance will be sanctioned, the principal's “type†is not revealed, and we find no evidence of crowding out. |
| Databáze: | OpenAIRE |
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