Limits to Bureaucratic Oversight? A Laboratory- and Survey-Experiment

• In Event: Experimental Research and Behavioral Public Administration

Abstract

This study tests the effect of Public Service Motivation (PSM) and job-related risk aversion on subjects' behavior in the Oversight Game (OG), a game-theoretical vehicle that captures the essence of the bureaucratic agency problem. Evidence from two experimental studies, namely a laboratory and a survey experiment, conducted with an identical parametrization of the OG, can be summarized in two points: First, the rational solution, a Nash equilibrium in mixed strategies, as well as the minimax decision rule fail to predict subjects' behavior. Second, individual characteristics matter, as higher levels of risk aversion make inspection more and shirking less likely, while PSM has only a limited effect on subjects’ behavior in the OG. These findings hint towards the conceptual limits of PSM and highlight the importance of understanding risk preference in order to devise effective oversight systems.

Authors

• Susumu Shikano, University of Konstanz

• Markus Stephan Tepe, Carl von Ossietzky Universität Oldenburg

• Michael Jankowski