An experimental study into the influence of works council advice on managerial decision-making

Saraï Sapulete*, Arjen Van Witteloostuijn, Wesley Kaufmann

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This paper experimentally studies the effect of works council advice on managerial decision-making, aiming to gain more insights into the fundamental mechanisms that may underlie the impact of works council advice. We conducted laboratory experiments in which subjects played a two-player Prisoner's Dilemma price-setting game as either a manager or works council representative. Half of the managers received an advice to opt for a low or a high price; the other half received no advice. Managers receiving advice to choose a low price (play Nash) have a higher tendency to choose a low price. Subjects with an other-regarding orientation tend to choose a high price. Furthermore, we found an interaction effect of advice for other-regarding managers.

Original languageEnglish
Pages (from-to)358-371
Number of pages14
JournalScandinavian Journal of Management
Volume30
Issue number3
DOIs
Publication statusPublished - 1 Jan 2014
Externally publishedYes

Keywords

  • Advice
  • Employee participation
  • Experimental economics
  • Managerial decision-making

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