DP12904 Sales Performance and Social Preferences

Author(s):	Andrea Essl, Michael Kosfeld, Markus Kröll, Frauke Von Bieberstein
Publication Date:	May 2018
Keyword(s):	experimental games, other-regarding preferences, sales performance
JEL(s):	C91, D91, M31
Programme Areas:	Industrial Organization
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=12904

We use an incentivized experimental game to uncover heterogeneity in other-regarding preferences among salespeople in a large Austrian retail chain. Our results show that the majority of agents take the welfare of others into account but a significant fraction reveals self-regarding behavior. Matching individual behavior in the game with firm data on sales performance shows that higher concern for others is significantly associated with higher revenue per customer. At the same time, it is also associated with fewer sales per day. Both effects offset each other, so that the overall association with total sales revenue becomes insignificant. Our findings highlight the nuanced role of self- vs. other-regarding concerns in sales contexts with important implications for management and marketing research.