Leveraging Social Relationships and Transparency in the Insider Game
| Autor: | Gary E. Bolton, Axel Ockenfels, Peter Werner |
|---|---|
| Přispěvatelé: | Microeconomics & Public Economics, RS: GSBE ETBC |
| Jazyk: | angličtina |
| Rok vydání: | 2016 |
| Předmět: |
Leverage (finance)
Rent extraction Transparency (market) media_common.quotation_subject 05 social sciences Economic rent Reciprocity Social ties Payment Transparency Insider Seekers Interpersonal ties 0502 economics and business Residual claimant Business 050207 economics Industrial organization 050205 econometrics media_common |
| Zdroj: | Journal of the Economic Science Association, 2(2), 127-143. Springer |
| ISSN: | 2199-6784 |
| DOI: | 10.1007/s40881-016-0030-x |
| Popis: | We exhibit a mechanism by which two parties leverage their social relationship to ratchet up the rents they collect from a third party residual claimant. Specifically, in a laboratory environment, we study a novel three-person insider game in which 'insiders' decide how to distribute profits among themselves and an 'outsider' who is the residual claimant. We find that the distribution of payments is largely determined by an informal quid pro quo among the two decision makers at the expense of the outsider. We then manipulate pay transparency and the competition to keep interaction partners, thereby improving the strategic position of one insider. Pay transparency increases the profit share that goes to rent seekers. In addition, rent extraction from the third party persists when competition for interaction partners is introduced. As a result, we find that payments both affect and reflect the influence of social relationships. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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