No abstract

We analyze the consequences of control on motivation in an experimental principalagent 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. (JEL D82, Z13)

Recent evidence suggests that prosocial behaviors like conditional cooperation and costly norm enforcement can stabilize large-scale cooperation for commons management. However, field evidence on the extent to which variation in these behaviors among actual commons users accounts for natural commons outcomes is altogether missing. Here, we combine experimental measures of conditional cooperation and survey measures on costly monitoring among 49 forest user groups in Ethiopia with measures of natural forest commons outcomes to show that (i) groups vary in conditional cooperator share, (ii) groups with larger conditional cooperator share are more successful in forest commons management, and (iii) costly monitoring is a key instrument with which conditional cooperators enforce cooperation. Our findings are consistent with models of gene-culture coevolution on human cooperation and provide external validity to laboratory experiments on social dilemmas.

"Persons agree to constraints on their own liberties in exchange for comparable constraints being imposed on the liberties of others." -James M. Buchanan and Roger D. Congleton (1998, p. 4) When markets fail, the design of appropriate institutions is a key issue for economic analysis and policy.Social dilemma situations (e.g., public goods, common pool resources), in which the pursuit of individual interests conflicts with the maximization of social welfare, are a classic example. In such situations, the

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 5040 June 2010 ABSTRACT Getting More Work for Nothing? Symbolic Awards and Worker PerformanceWe study the impact of status and social recognition on worker performance in a field experiment. In collaboration with an international non-governmental organization we hired students to work on a database project. Students in the award treatment were offered a congratulatory card from the organization honoring the best performance. The award was purely symbolic in order to ensure that any behavioral effect is driven by non-material benefits. Our results show that students in the award treatment outperform students in the control treatment by about 12 percent on average. Our results provide strong evidence for the motivating power of status and social recognition in labor relations with major implications for theory and applications. JEL Classification:C93, M52

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor, (2) internationalization of labor markets, (3) welfare state and labor market, (4) labor markets in transition countries, (5) the future of labor, (6) evaluation of labor market policies and projects and (7) general labor economics. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author. We present an economic experiment on network formation, in which subjects can decide to form links to one another. Direct links are costly but being connected is valuable. The gametheoretic basis for our experiment is the model of Bala and Goyal (2000). They distinguish between two scenarios regarding the flow of benefits through a network, the so-called 1-way and 2-way flow model. Our main results show that the prediction based on Nash and strict Nash equilibrium works well in the 1-way flow model but fails largely in the 2-way flow model. We observe a strong learning dynamic in the 1-way flow model but less so in the 2-way flow model. Finally, costs of a direct link have a positive impact on the occurrence of (strict) Nash networks in the 1-way flow model but a negative impact in the 2-way flow model. In our discussion on possible explanations for these results we focus on strategic asymmetry and asymmetry with respect to payoffs. We find that the latter asymmetry, i.e., payoff inequity, plays an important role in the network formation process.JEL Classification: C92, C72, D63, Z13

We conduct a social dilemma experiment in which real-world leaders can punish group members as a third party. Despite facing an identical environment, leaders are found to take remarkably different punishment approaches. The different leader types revealed experimentally explain the relative success of groups in managing their forest commons. Leaders who emphasize equality and efficiency see positive forest outcomes. Antisocial leaders, who punish indiscriminately, see relatively negative forest outcomes. Our results highlight the importance of leaders in collective action, and more generally the idiosyncratic but powerful roles that leaders may play, leading to substantial variation in group cooperation outcomes. (JEL C93, D03, O13, Q23)

Neuroeconomics merges methods from neuroscience and economics to better understand how the human brain generates decisions in economic and social contexts. Neuroeconomics is part of the general quest for microfoundations-in this case, the microfoundation of individual decision-making in social contexts. The economic model of individual decision-making is based on three concepts: the action set, preferences, and beliefs. Economists assume that an individual will choose his preferred action for a given set of available actions and a given belief about the states of the world and the other players' actions. Neuroeconomics provides a microfoundation for individual beliefs, preferences, and behavior; it does so by examining the brain processes associated with the formation of beliefs, the perception of the action set, and the actual choice. Moreover, since the set of available actions can be framed in different ways and different frames of the same action set sometimes elicit different behaviors, neuroeconomics may also contribute to a deeper understanding of framing effects. This paper discusses recent neuroeconomic evidence related to other-regarding (nonselfish) behaviors and the decision to trust in other people's nonselfish behavior. As we will show, this evidence supports the view that people derive nonpecuniary utility (i) from mutual cooperation in social dilemma (SD) games and (ii) from punishing unfair behavior in these games. Thus, mutual cooperation that takes place despite strong free-riding incentives, and the punishment of free riders in SD games is not irrational, but better understood as rational behavior of people with corresponding social preferences. Finally, we report the results of a recent study that examines the impact of the neuropeptide oxytocin (OT) on trusting and trustworthy behavior in a sequential SD. Animal studies have identified OT as a hormone that induces prosocial approach behavior, suggesting that it may also affect prosocial behavior in humans. Indeed, the study shows that subjects given OT exhibit much more trusting behavior, despite the fact that OT does not seem to change their explicit beliefs about others' behavior. This suggests that OT has a direct impact on certain as-