BEHAVIOURAL ECONOMICS OF ORGANIZATION: EMPLOYEES AND MANAGERS
If you are an economist, you are reading this article without any ﬁnancial incentive from your employer. It is equally difﬁcult to verify that such activity will contribute to your growth of human capital and increased productivity in research or teaching. (That does not prevent the authors from hoping it will.) The standard economic model, which explains employee’s effort only through the wage (determined by productivity), is therefore incomplete.
Jméno a příjmení autora:
Petr Houdek, Petr Koblovský
Behavioural economics, ﬁrm culture, ﬁeld experiments, gift exchange, hubris, CEO, intrinsic and extrinsic motivation, loss aversion, reference-dependence model, reciprocity, social preferences, wage, labour
This short perspective article presents an overview of empirical evidence on the behavioural organizational economics on the basis of the extended standard model of worker’s behaviour. The…více
This short perspective article presents an overview of empirical evidence on the behavioural organizational economics on the basis of the extended standard model of worker’s behaviour. The advancements of behavioural economics theories, new detailed and structured data on actions of economic actors, and increasingly used ﬁ elds experiments provide a strong basis for the creation of more precise and more robust models of the behaviour of employers and employees. In this article we analyse 4 stylized extensions of standard model of worker’s behaviour. Firstly, we give several examples of worker’s reference dependent decision-making. Secondly, we utilize Akerlof’s hypothesis on the relationship between an employer and an employee which is as predicted very reciprocal, similarly to the gifts exchange paradigm. We show that the more the employee thinks s/he is trusted by the employer, the harder and more efﬁ ciently s/he works. Thirdly, we show several instances of the importance of extrinsic and intrinsic motivation in employees and how those two motivations interfere with each other and crowd each other out in some situations. The research shows that meaningfulness of the work can be a signiﬁ cant driver of the employees’ efﬁ ciency as well. In the last section devoted to employees we provide evidence on the impacts of relative performance compensation on cooperation, reciprocity, and sabotage in ﬁ rms. The last part is devoted to analysing behavioural regularities of managers in their day-to-day decision-making. The overview brieﬂy expands particularly on their over-optimism and on their possibly undeserved remuneration resulting from random events and market changes rather than from the managerial skills. The article concludes by proposing possible directions for further ﬁeld research.