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Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence

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Author Info
Jordi Brandts
Gary Charness

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Abstract

We study how two dimensions of market conditions affect behaviour in experimental gift-exchange markets with repeated interaction. First, we consider the impact of competitive imbalance, by varying whether there is an excess supply of "firms" or an excess supply of "workers" in the market. Second, we impose a minimum wage in the market with an excess supply of workers, and study the overall effect on wages and productivity. Perhaps surprisingly, the state of competition does not appear to have strong effects in our data; however, there is some evidence of lower productivity when a minimum wage is imposed. Copyright 2004 Royal Economic Society.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 114 (2004)
Issue (Month): 497 (07)
Pages: 684-708
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Handle: RePEc:ecj:econjl:v:114:y:2004:i:497:p:684-708

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  1. Jean-Robert Tyran & Arno Riedl, 2003. "Tax Liability Side Equivalence in Gift-Exchange Labor Markets," University of St. Gallen Department of Economics working paper series 2003 2003-15, Department of Economics, University of St. Gallen. [Downloadable!]
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  2. Jordi Brandts & Arno Riedl & Frans van Winden, 2004. "Competition and Well-Being," UFAE and IAE Working Papers 608.04, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
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  3. Antonio Cabrales & Gary Charness & Marie-Claire Villeval, 2006. "Competition, Hidden Information and Efficiency: An Experiment," IZA Discussion Papers 2296, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Sandra Maximiano & Randolph Sloof & Joep Sonnemans, 2004. "Gift Exchange in a Multi-worker Firm," Tinbergen Institute Discussion Papers 04-100/1, Tinbergen Institute. [Downloadable!]
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  5. Jordi Brandts & Arthur Schram & Klarita Gërxhani, 2007. "Information Networks and Worker Recruitment," UFAE and IAE Working Papers 707.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
  6. Armin Falk & David Huffman, 2006. "Studying Labor Market Institutions in the Lab: Minimum Wages, Employment Protection and Workfare," IZA Discussion Papers 2310, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Armin Falk & Ernst Fehr & Christian Zehnder, 2005. "The Behavioral Effects of Minimum Wages," IZA Discussion Papers 1625, Institute for the Study of Labor (IZA). [Downloadable!]
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