Hierarchy, coercion, and exploitation: An experimental analysis

Nikos Nikiforakis, Jörg Oechssler, Anwar Shah

Research output: Contribution to journalArticle

Abstract

The power to coerce workers is important for the efficient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player interact repeatedly for a finite number of periods. We find that senior players try repeatedly to use their power to exploit junior workers. These attempts are successful only when junior workers have incomplete information about how their effort impacts on the earnings of senior players, but not when they have complete information. Evidence from an incentive-compatible questionnaire indicates that the social acceptability of exploitation depends on whether the junior worker can detect she is being exploited. We also show how a history of exploitation affects future interactions.

Original languageEnglish (US)
Pages (from-to)155-168
Number of pages14
JournalJournal of Economic Behavior and Organization
Volume97
DOIs
StatePublished - Jan 1 2014

Keywords

  • Coercion
  • Disobedience
  • Exploitation
  • Hierarchy
  • Social norms

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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