Prosocial Managers, Employee Motivation, and the Creation of Shareholder Value
In: IZA Discussion Paper No. 11789
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In: IZA Discussion Paper No. 11789
SSRN
In: Journal of behavioral and experimental economics, Band 112, S. 102246
ISSN: 2214-8043
SSRN
In: American economic review, Band 108, Heft 2, S. 419-453
ISSN: 1944-7981
This paper studies lying. An agent randomly picks a number from a known distribution. She can then report any number and receive a monetary payoff based only on her report. The paper presents a model of lying costs that generates hypotheses regarding behavior. In an experiment, we find that the highest fraction of lies is from reporting the maximal outcome, but some participants do not make the maximal lie. More participants lie partially when the experimenter cannot observe their outcomes than when the experimenter can verify the observed outcome. Partial lying increases when the prior probability of the highest outcome decreases. (JEL C91, D12, D90, Z13)
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Wer der Ungewissheit angesichts der Pandemie mit übermäßigem Konsum von Informationen begegnet, strapaziert seine kognitive Kapazität über Gebühr.
Beyond the many choices and challenges humans face during the pandemic lies a constant cognitive trade-off: Those who excessively absorb news against uncertainty run the risk of impaired cognitive functions.
In: Journal of risk and uncertainty, Band 56, Heft 1, S. 1-17
ISSN: 1573-0476
Milton Friedman has famously claimed that the responsibility of a manager who is not the owner of a firm is "to conduct the business in accordance with their [the shareholders'] desires, which generally will be to make as much money as possible." In this paper we argue that when contracts are incomplete it is not necessarily in the interest even of money maximizing shareholders to pick a manager who pursues this goal. We show in a formal model and in a series of lab experiments that choosing a manager who has a preference to spend resources for social causes can increase employee motivation. In turn, ex-post losses in shareholder value may be offset by ex-ante gains in performance through higher employee motivation.