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.
- employee participation
- managerial decision-making
- experimental economics
Sapulete, S., van Witteloostuijn, A., & Kaufmann, W. (2014). An experimental study into the influence of works council advice on managerial decision-making. Scandinavian Journal of Management, 30(3), 357-371. https://doi.org/10.1016/j.scaman.2014.03.001