Portal de Periódicos da CAPES

The Hidden Costs of Control

2006; American Economic Association; Volume: 96; Issue: 5 Linguagem: Inglês

10.1257/aer.96.5.1611

1944-7981

Armin Falk, Michael Kosfeld,

Evolutionary Game Theory and Cooperation

We analyze the consequences of control on motivation in an experimental principal-agent game, where the principal can control the agent by implementing a minimum performance requirement before the agent chooses a productive activity. Our results show that control entails hidden costs since most agents reduce their performance as a response to the principal's controlling decision. Overall, the effect of control on the principal's payoff is nonmonotonic. When asked for their emotional perception of control, most agents who react negatively say that they perceive the controlling decision as a signal of distrust and a limitation of their choice autonomy.