Mediocrity and induced reciprocity

Arbeitspapier

We report evidence from an experiment where a principal chooses an agent out of two to perform a task for a fixed compensation. The principal's payoff depends on the agent's ex-ante ability and on a non-contractible effort that the agent has to exert once employed. We find that a significant share of principals select the mediocre agent (i.e. the one with the lower ex-ante ability). When the principal is allowed to send a message, mediocre agents exert more effort than agents with higher ability, and principals who choose mediocre agents on average have a larger payoff than principals who select agents with higher ability. This difference in effort overcompensates the difference in ability. Mediocre agents reciprocate more than agents who have ex-ante higher ability when the principals are able to make them feeling indebted.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2012-19

Classification and Topics

• Classification: Wirtschaft
• Subject: reciprocity ; communication ; incentives ; mediocrity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Montinari, Natalia ; Nicolo, Antonio ; Oexl, Regine
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/73885
• Last update: 10.03.2025, 11:43 AM CET