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Leadership Styles andLabor MarketConditions Robert DurOla KvaløyAnja Schöttner2021 год

Leadership Styles and Labor Market Conditions
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Аннотация: Why do some leaders use praise as a means to motivate workers, whereas other leaders use social punishment? This paper develops a simple economic model to examine how leadership styles depend on the prevailing labor market conditions for workers. We show that the existence of a binding wage floor for workers (e.g., due to trade union wage bargaining, minimum wage legislation, or limited-liability protection) can make it attractive for firms to hire a leader who makes use of social punishment. Although the use of social punishments generally is socially inefficient, it lessens the need for high bonus pay, which allows the firm to extract rents from the worker. In contrast, firms hire leaders who provide praise to workers only if it is socially efficient to do so. Credible use of leadership styles requires either repeated interaction or a leader with the right social preferences. In a single-period setting, only moderately altruistic leaders use praise as a motivation tool, whereas only moderately spiteful leaders use social punishment. Lastly, we show that when the leaders’ and workers’ reservation utilities give rise to a bigger income gap between leaders and workers, attracting spiteful leaders becomes relatively less costly and unfriendly leadership becomes more prevalent. This paper was accepted by Axel Ockenfels, behavioral economics and decision analysis.
Год издания: 2021
Авторы: Robert Dur, Ola Kvaløy, Anja Schöttner
Издательство: Institute for Operations Research and the Management Sciences
Источник: Management Science
Ключевые слова: Experimental Behavioral Economics Studies, Culture, Economy, and Development Studies, Economic Theory and Institutions
Другие ссылки: Management Science (HTML)
EUR Research Repository (Erasmus University Rotterdam) (PDF)
EUR Research Repository (Erasmus University Rotterdam) (HTML)
EUR Research Repository (Erasmus University Rotterdam) (HTML)
RePEc: Research Papers in Economics (HTML)
Open access LMU (Ludwid Maxmilian's Universitat Munchen) (PDF)
Open access LMU (Ludwid Maxmilian's Universitat Munchen) (HTML)