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 language | English |
|---|---|
| Pages (from-to) | 358-371 |
| Number of pages | 14 |
| Journal | Scandinavian Journal of Management |
| Volume | 30 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1 Jan 2014 |
| Externally published | Yes |
Funding
We would like to thank Stephanie Rosenkranz and Vincent Buskens for using the ELSE laboratory, as well as for their valuable comments on programming and the ins and outs of experimental economics. We are grateful to Jan Potters for his helpful comments regarding the content of the paper. Furthermore, we would like to thank our colleagues who helped us out with the pilot experiment. We also thank the two anonymous reviewers for their constructive comments. Saraï Sapulete gratefully acknowledges the financial support from the academic department of the Hans Böckler Stiftung, the WSI ( Wirtschafts- und Sozialwissenschaftliches Institut ). The WSI did not have any further involvement in the preparation of the article and conduct of the research.
Keywords
- Advice
- Employee participation
- Experimental economics
- Managerial decision-making
