%0 Report
        %A Burdin, Gabriel
%A Halliday, Simon
%A Landini, Fabio
        %T Third-Party vs. Second-Party Control: Disentangling the Role of Autonomy and Reciprocity
        %D 2015
        %8 2015 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 9251
        %U https://www.iza.org/publications/dp9251
        %X This paper studies the role of autonomy and reciprocity in explaining control averse responses in principal-agents interactions. While most of the social psychology literature emphasizes the role of autonomy, recent economic research has provided an alternative explanation based on reciprocity. We propose a simple model and an experiment to test the relative strength of these two motives. We compare two treatments: one in which control is exerted directly by the principal (second-party control); and the other in which it is exerted by a third party enjoying no residual claimancy rights (third-party control). If control aversion is driven mainly by autonomy, then it should persist in the third-party treatment. Our results, however, suggest that this is not the case. Moreover, when a third party instead of the principal exerts control, control results in a greater expected profit for the principal. The implications of these results for organizational design are discussed.
        %K social preferences
%K principal-agent game
%K autonomy
%K control aversion
%K second party
%K third party
%K trust
%K reciprocity