Principal’s distributive preferences and the incentivization of agents - Archive ouverte HAL Accéder directement au contenu
Article Dans Une Revue Experimental Economics Année : 2023

Principal’s distributive preferences and the incentivization of agents

Sophie Cêtre
Max Lobeck

Résumé

Do principals' distributive preferences affect the allocation of incentives within firms? We run a Principal-Agent lab experiment, framed as a firm setting. In the experiment, subjects are randomized in the principal or worker position. Principals must choose piece rate wage contracts for two workers that differ in terms of ability. Workers have to choose an effort level that is non-contractible. Principals are either paid in proportion to the output produced (Stakeholder treatment) or paid a fixed wage (Spectator treatment). We study how principals make trade-offs between incentive concerns (motivating workers to maximize output) and their own normative distributive preferences. We find that, despite the firm-frame and the moral hazard situation, principals do hold egalitarian concerns, as principals are on average willing to trade off their firm's performance (and so their own income) for more wage equality among their workers. The willingness to reduce inequality among workers is sensitive to both extensive and intensive margin incentives, which shows that principals' choices are shaped by incentives that they face themselves.
Fichier principal
Vignette du fichier
s10683-023-09791-0 (2).pdf (1.07 Mo) Télécharger le fichier
Origine : Fichiers éditeurs autorisés sur une archive ouverte
Licence : CC BY - Paternité

Dates et versions

hal-04347515 , version 1 (15-12-2023)

Licence

Paternité

Identifiants

Citer

Sophie Cêtre, Max Lobeck. Principal’s distributive preferences and the incentivization of agents. Experimental Economics, 2023, 26 (3), pp.646-672. ⟨10.1007/s10683-023-09791-0⟩. ⟨hal-04347515⟩
32 Consultations
14 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More