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American Economic Review Vol. 89 No. 4 1999

Gaming Against Managers in Incentive Systems: Experimental Results with Chinese Students and Chinese Managers

David J. Cooper1; John H. Kagel2; Wei Lo3; Qing Liang Gu4

1 Department of Economics, Case Western Reserve University, Cleveland, OH 44106. · 2 Department of Economics, Arps Hall, Ohio State University, 1945 North High Street, Columbus, OH 43210. · 3 Institute for Mainland China Studies, National Dong Hwa University, 1, Sec. 2, Da-Hsueh Road, Hualien 97441, Taiwan. · 4 Glorious Sun School of Business & Management, China Textile University, 1882 West Yan-An Road, Shanghai 200051, China.

Abstract

We examine strategic interactions between firms and planners in China, comparing behavior between: (i) students and managers with field experience with this situation, (ii) standard versus increased monetary incentives, and (iii) sessions conducted “in context,” making explicit reference to interactions between planners and managers, and those without any such references. The dynamics of play are similar across treatments with play only gradually, and incompletely, converging on a pooling equilibrium. A fivefold increase in incentives significantly increases initial levels of strategic play. Games played in context generated greater levels of strategic play for managers, with minimal impact on students.

DOI
10.1257/aer.89.4.781
Volume
89
Issue
4
Pages
781-804
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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