Matthias Heinz receives ERC Starting grant

Prof. Dr. Matthias Heinz, part-time member of our Experimental Economics Group, has received an ERC Starting grant, i.e., one of the most prestigious and highly-endowed research grants in Europe. In his ERC project „Managing People - How Employees’ Social Preferences Shape the Returns to Management Practices” Matthias Heinz analyzes the causal effects of management practices and studies to what extent employees’ social preferences shape the returns of the considered management practices.

Social preferences – like reciprocity, and fairness concerns – describe how humans care not only about their own material payoff, but also about the well-being of others. Work plays a central role in peoples’ lives, with most working-age people spending a large portion of their waking hours working – together with others – in firms. The key idea of Matthias Heinz’s research project is that social preferences in the workforce might be important for the way in which firms manage their workers.

In RCTs, Matthias Heinz randomizes management practices (e.g. monitoring, incentives, regular meetings) within a bakery chain, a grocery retail chain and a kitchen manufacturer. By doing so, he can identify the causal effects of the considered management practices on multiple outcomes, e.g. sales and turnover. In a second step, he collects survey data on employees’ social preferences to study how social preferences shape the returns of the management practices.

Matthias Heinz’s ERC project helps us to clarify to what extent peoples’ social preferences matter for the management and organizational structure of societal groups, and what this implies for the design of firms, workplace productivity and welfare.