%0 Report
        %A Masella, Paolo
%A Meier, Stephan
%A Zahn, Philipp
        %T Incentives and Group Identity
        %D 2012
        %8 2012 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 6815
        %U https://www.iza.org/index.php/publications/dp6815
        %X This paper investigates in a principal-agent environment whether and how group membership influences the effectiveness of incentives and when incentives can have “hidden costs”, i.e., a detrimental effect. We show experimentally that in all interactions control mechanisms can have hidden costs for reasons specific to group membership. In within-group interactions control has detrimental effects because the agent does not expect to be controlled and reacts negatively when being controlled. In between-group interactions, agents perceive control more hostile once we condition on their beliefs about principal's behavior. Our finding contributes to the micro-foundation of psychological effects of incentives.
        %K trust
%K crowding out
%K motivation
%K incentives
%K social preferences
%K social identity
%K experiment