Other-regarding preferences and management styles

We use a laboratory experiment to examine whether and to what extent other-regarding preferences (efficiency, inequality aversion and maximin concerns) of team managers influence their management style in choice under risk. We find that managers who prefer efficiency are more likely to exercise an autocratic management style by ignoring preferences of their team members. Equality concerns have no significant impact on management styles. Elected managers have a higher propensity than exogenously assigned managers to use a democratic management style by reaching team consensus. We also find that male managers employ a democratic style more often than women.

► We analyze management style in choice under risk in a laboratory experiment.
► Managers who prefer efficiency are more likely to exercise an autocratic management style.
► Equality concerns have no significant effect on management styles.
► Elected managers have a higher propensity than exogenously assigned managers to use a democratic management style.
► Male managers employ a democratic style more often than women.