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Staff of the Max Planck Institute

Katrin Schmelz

	Katrin Schmelz
	Research Fellow
	Max Planck Institute of Economics, IMPRS "Uncertainty" Kahlaische Straße 10 D-07745 Jena Germany
	This page is not maintained anymore since 04/2011.

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Education

11/2007 - 04/2011	Ph.D. Student at the Max Planck Institute of Economics, IMPRS "Uncertainty"
2006 – 2007	Research visits in Russia (International Institute of Economics, Law and Management of the NNGASU, Nizhny Novgorod State University of Architecture and Civil Engineering)
2003	Diploma degree in Psychology (1.1), University of Jena

Work experience

2004 – 2007	Psychologist at the hospital HELIOS (center of social pediatrics), Erfurt
2001 – 2003	Neuropsychological internship and employment at "Moritz-Klinik", Bad Klosterlausnitz
1997 – 1999	Student assistant at the Chair of Methodology and Evaluation Research (Prof. Rolf Steyer, University of Jena)

Dissertation

Control and Motivation in Employment Relationships: Evidence on Cultural and Individual Differences

In my dissertation I investigate the interaction between control and motivation in employment relationships. The interaction between control and motivation is analyzed in a simple employment situation where the employee chooses among productive activities after the employer determined the employee's choice set. To each productive activity is associated a cost for the employee and a benefit for the employer. The extent to which the employer determines the employee's choice set corresponds to the degree of control implemented by the former in the work environment of the latter. For example, in an employment situation where the employee chooses a costly effort which increases the employer's payoff, the control mechanism prevents the employee from choosing low efforts.
According to the standard economic view, the employer should implement the most deterrent control mechanism as more control implies higher costs of shirking for employees and the latter will be opportunistic whenever they perceive that the benefits of shirking exceed the costs. Though they acknowledge the disciplining effect of control, psychologists and sociologists argue that the introduction of close supervision can be counterproductive since it may reduce the employees' intrinsic motivation. A broader view of human motivation therefore suggests that, in many employment relationships, the imposition of control is likely to have two opposite effects on the employees' performance: a disciplining effect and a crowding-out effect. Whether introducing close supervision is beneficial to the employer depends on the relative size of the two countervailing effects and both effects are likely to vary in size with individual and situational conditions.

The three chapters of my dissertation extend the economic literature on conditions under which crowding-out effects arise, and under which they are predicted to dominate disciplining effects (Frey and Jegen, 2001; Falk and Kosfeld, 2006; Dickinson and Villeval, 2008; Bartling, Fehr, and Schmidt, 2010). In particular, I collect evidence on cultural and individual differences in reactions to control.

The first chapter reports on a robustness check of the surprising findings by Falk and Kosfeld (AER, 2006). The latter study implements a principal-agent game where the agent chooses to transfer part of his endowment to the principal who has the possibility to enforce a minimal transfer. Falk and Kosfeld's experimental results show that the control strategy entails hidden costs caused by the existence of control-averse agents who choose a lower transfer if forced than otherwise and that these hidden costs outweigh the benefits of control. In collaboration with Matteo Ploner and Anthony Ziegelmeyer I repeat the principal-agent game on three student samples which differ in their demographics. Our experimental results confirm the existence of hidden costs of control, but they do not outweigh the benefits of control. We also provide preliminary insights in individual determinants of reactions to control (a revised version of this chapter is available as a working paper, see below).

In my second chapter I compare an internet and a laboratory implementation of an extended version of Falk and Kosfeld's principal-agent game (in collaboration with Anthony Ziegelmeyer). We investigate whether agents' reactions to a principal's imposition of control differ in the presence of an independent source of control (background control). The principal has the possibility to control the agent by choosing one out of three enforcement levels before the agent chooses an effort level. We implement a repeated trial environment and elicit incentivized beliefs before each repetition. Our experimental results show that negative reactions to control are stronger in the laboratory experiment, where background control is present, than in the internet experiment, where background control is (almost) absent. However, negative reactions to control are of similar magnitude at the end of the two experiments which indicates that experienced agents react similarly to the implementation of control in the absence or presence of background control (an early version of the corresponding research paper is available below).

The impact of culture and socio-demographic background on reactions to control is the topic of my third chapter. I conduct a large-scale internet study to investigate whether East and West Germans differ in their reactions to control. In the former East Germany, institutionalized restrictions of citizens' choice sets was common practice. Reunified Germany offers a great opportunity to analyze the long-term effects of an oppressive political regime on reactions to control in employment relationships. All data are collected on the internet. In the first wave I rely on student samples from two East German and two West German locations. Born in the time of German reunification, students in both parts of Germany have experienced the same political regime but different values might have been transmitted to them by their parents and teachers. In the second wave I address the German population within an age range of 25 to 65 years. These older participants have experienced different political regimes in the East and in the West, and the influence of the political regime is likely to vary with the age of the participant. I restrict my sample to German native speakers who are economically active and have a university degree. [work in progress]

From a methodological point of view, I complement laboratory experiments with field experiments on the internet. The primary advantage of the internet is the access to a larger, more diverse subject pool. In addition to convenience samples of undergraduate students, my studies involve participants who act on a daily basis as principals and agents in naturally occurring employment relationships. To account for the heterogeneity of the target population, data need to be collected on a large scale. A substantial amount of my doctoral time has been dedicated to the development of an internet platform for large-scale experiments (in collaboration with Anthony Ziegelmeyer). This platform allows one to easily set up synchronized experiments where all participants are present at the same time (drop-outs are taken care of) as well as asynchronous experiments where participants enter and leave the platform on many occasions not necessarily at the same time.

Forthcoming papers

• Hidden Costs of Control: Four Repetitions and an Extension. Experimental Economics, forthcoming (with Matteo Ploner and Anthony Ziegelmeyer).

Working papers

• Hidden Costs of Control: Three Repetitions and an Extension, 2010 (with Matteo Ploner and Anthony Ziegelmeyer). [PAPER] [SM]
• Reactions to Control with(out) Background Control: Evidence from the Internet and the Laboratory (with Anthony Ziegelmeyer). [PAPER]

Work in progress

• Cultural and Individual Determinants of Reactions to Control: Evidence from a Large-Scale Internet Experiment.
• Control and Culture in Experimental Labor Markets.

Contributions to books

Complementary Cooperation in Russian-German Teams: The Potential of Cognitive Cross-Cultural Psychology with Regard to Complex Problem Solving and Time Use. In: Helfrich, Hölter, Dakhin, and Arzhenowskij (eds.). Impact of Culture on Human Interaction: Clash or Challenge? Hogrefe, pp. 331-345, 2008.

Von denen, die auszogen, ihre Stärken zu finden - Ein erlebnistherapeutisches Tagesseminar in der psychosomatischen Rehabilitation. In: Ferstl, Schettgen, and Scholz (eds.). Der Nutzen des Nachklangs. ZIEL – Zentrum für interdisziplinäres erfahrungsorientiertes Lernen, pp. 257-267, 2004 (with Clemens Chemnitz).