Assistant Professor Dr. Rainer Michael Rilke
Economics Group

Assistant Professor

+49 (0)261 6509 814
rainer.rilke(at)whu.edu

Education

Date University Degree
2014 University of Cologne Doctoral degree at Department of Corporate Development and Business Ethics (Supervisor: Prof. Dr. Bernd Irlenbusch)
2009 University Bonn Diploma in Economics
2003 Irmgardis Gymnasium Cologne Abitur

Publications

We set up a laboratory experiment to investigate systematically how varying the magnitude of outside options—the payoffs that materialize in case of a bargaining breakdown—of proposers and responders influences players’ demands and game outcomes (rejection rates, payoffs, efficiency) in ultimatum bargaining. We find that proposers as well as responders gradually increase their demands when their respective outside option increases. Rejections become more likely when the asymmetry in the players’ outside options is large. Generally, the predominance of the equal split decreases with increasing outside options. From a theoretical benchmark perspective we find a low predictive power of equilibria based on self-regarding preferences or inequity aversion. However, proposers and responders seem to be guided by the equity principle (Selten, The equity principle in economic behavior. Decision Theory, Social Ethics, Issues in Social Choice. Gottinger, Hans-Werner and Leinfellner, Werner, pp 269–281, 1978), while they apply equity rules inconsistently and self-servingly.

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Organizations aim to influence—via their internal guidelines and corporate culture—how unfair treatment of other stakeholders is perceived and condemned by employees. To understand how different frames and forms of publicity influence moralistic punishment, that is, the willingness of employees to take costs in order to foster norm compliance, we employ a modified version of a dictator game. In our dictator game, a bystander observes a dictator’s behavior towards a recipient and can punish the dictator. We vary how the dictator’s action is framed (either as giving money to the recipient or taking money from the recipient) and whether or not the recipient, as a victim of unfair behavior, is informed about the punishment. Our results suggest that bystanders are more likely to punish dictators when their action is framed as giving rather than taking, although both lead to the same consequences. When bystanders cannot inform recipients about their punishment, less punishment can be observed. On average, dictators partially anticipate this effect and behave more generously when recipients are informed about the bystanders’ punishment.

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Organizational monitoring relies frequently on self-reports (e.g., work hours, progress reports, travel expenses). A “one-by-one” policy requires employees to submit a series of reports (e.g., daily or itemized reports). An “all-at-once” policy requires an overall report (e.g., an annual or an overview report). Both policies use people's self-reports to determine their pay, and both allow people to inflate their reports to get higher incentives, that is, to cheat. Objectively, people can cheat to the same extent under both reporting policies. However, the two policies differ in that the segmented one-by-one policy signals closer monitoring than the all-at-once policy. We suggest here that lie aversion may have a paradoxical effect on closer monitoring and lead people to cheat more. Specifically, reporting a series of segmented units of performance (allowing small lies) should lead to more cheating than a one-shot report of overall performance (that require one larger lie). Two surveys indicated that while people perceive the all-at-once policy as more trusting, they still expected people would be equally likely to cheat in both policies. An experiment tested the effects of the two reporting policies on cheating. The findings showed that contrary to the participants' intuition, but in line with research on lie aversion, the one-by-one policy resulted in more cheating than the all-at-once policy. Implications for future research and organization policy are discussed.

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Ambiguity about the chances of winning represents a key aspect in lotteries. By means of a controlled field experiment, we exogenously vary the degree of ambiguity about the winning chances of lotteries organized to incentivize the contribution for a public good. In one treatment, people have been simply informed about the maximum number of potential participants (i.e. the number of lottery tickets released). In a second treatment, this information has been omitted as in all traditional lotteries. Our general finding shows that simply reducing the degree of ambiguity of the lottery leads to a sizable and significant increase (67%) in the participation rate. This result is robust to alternative prize configurations.

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How to hire voluntary helpers? We shed new light on this question by reporting a field experiment in which we invited 2859 students to help at the ‘ESA Europe 2012’ conference. Invitation emails varied non-monetary and monetary incentives to convince subjects to offer help. Students could apply to help at the conference and, if so, also specify the working time they wanted to provide. Just asking subjects to volunteer or offering them a certificate turned out to be significantly more motivating than mentioning that the regular conference fee would be waived for helpers. By means of an online-survey experiment, we find that intrinsic motivation to help is likely to have been crowded out by mentioning the waived fee. Increasing monetary incentives by varying hourly wages of 1, 5, and 10 Euros shows positive effects on the number of applications and on the working time offered. However, when comparing these results with treatments without any monetary compensation, the number of applications could not be increased by offering money and may even be reduced.

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In four bargaining games with an option to punish, participants could avoid punishment by shifting the blame for an unfair offer on a random coin flip. Punishments were not affected by whether the results of the coin flip could be verified, nor by beliefs about whether a coin had actually been flipped (Studies 1–3). Our results suggest that the rather blatant moral posturing of hypocrites was enough to create reasonable doubt about their guilt, and that such doubt deterred punishment. Alternative explanations of reluctance to punish hypocrites, such as free-riding from altruistic punishment (Study 2), or feelings of gratitude (Study 3) were not supported. Independent third parties were also less punitive toward those who blamed the coin (Study 4). Similar results were found in an online vignette study run with a more representative sample (Study 5). In sum, these findings suggest that hypocrisy thrives because it can deter punishment.

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We apply the die rolling experiment of Fischbacher and Föllmi-Heusi (2013) to a two-player tournament incentive scheme. Our treatments vary the prize spread. The data highlights that honesty is more pronounced when the prize spread is small.

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We investigate the influence of two popular compensation schemes on subjects’ inclination to lie by adapting an experimental setup of Fischbacher and Heusi (2008). Lying turns out to be more pronounced under team incentives than under individual piece-rates, which highlights a fairly neglected feature of compensation schemes. Moreover, when disentangling different motives of the more pronounced unethical conduct under team incentives, we find that subjects tend to lie more under team incentives because they can diffuse their responsibility, i.e., their deceptive acts cannot unambiguously be attributed to them individually. Our findings are robust even when controlling for individual difference variables. In both compensation schemes subjects who are younger, male, high on Extraversion, and high on Neuroticism tend to lie more.

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