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Wage transparency and performance: A real-effort experiment

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  • Greiner, Ben
  • Ockenfels, Axel
  • Werner, Peter

Abstract

Without transparency about peer wages in a real effort experiment, a change of wages does not affect performance. With transparency, however, higher paid workers tend to work more accurately, and lower paid workers shirk more under piece rates.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 111 (2011)
Issue (Month): 3 (June)
Pages: 236-238

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Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:236-238

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Web page: http://www.elsevier.com/locate/ecolet

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Keywords: Labor market experiments Real effort Social comparison Wage schemes;

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References

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  1. Gächter, Simon & Thöni, Christian, 2010. "Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 531-543, December.
  2. Fernanda Rivas, 2009. "Wage dispersion and workers` effort," Economics Bulletin, AccessEcon, vol. 29(2), pages 788-794.
  3. Hennig-Schmidt, Heike & Rockenbach, Bettina & Sadrieh, Abdolkarim, 2005. "In Search of Workers' Real Effort Reciprocity - A Field and a Laboratory Experiment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 55, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Charness, Gary & Kuhn, Peter J., 2010. "Lab Labor: What Can Labor Economists Learn from the Lab?," IZA Discussion Papers 4941, Institute for the Study of Labor (IZA).
  5. Uri Gneezy & John A List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," Econometrica, Econometric Society, vol. 74(5), pages 1365-1384, 09.
  6. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  7. John A. List & Imran Rasul, 2010. "Field Experiments in Labor Economics," NBER Working Papers 16062, National Bureau of Economic Research, Inc.
  8. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  9. Ernst Fehr & Lorenz Goette & Christian Zehnder, 2009. "A Behavioral Account of the Labor Market: The Role of Fairness Concerns," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 355-384, 05.
  10. Andrew E. Clark & David Masclet & Marie Claire Villeval, 2010. "Effort and Comparison Income: Experimental and Survey Evidence," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(3), pages 407-426, April.
  11. Frank, Robert H, 1984. "Are Workers Paid Their Marginal Products?," American Economic Review, American Economic Association, vol. 74(4), pages 549-71, September.
  12. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2010. "Bonus Payments and Reference Point Violations," IZA Discussion Papers 4795, Institute for the Study of Labor (IZA).
  13. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  14. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
  15. Bellemare, Charles & Shearer, Bruce, 2009. "Gift giving and worker productivity: Evidence from a firm-level experiment," Games and Economic Behavior, Elsevier, vol. 67(1), pages 233-244, September.
  16. Robert H. Frank, 1984. "Interdependent Preferences and the Competitive Wage Structure," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 510-520, Winter.
  17. Burchett, Richard & Willoughby, John, 2004. "Work productivity when knowledge of different reward systems varies: Report from an economic experiment," Journal of Economic Psychology, Elsevier, vol. 25(5), pages 591-600, October.
  18. repec:feb:artefa:0109 is not listed on IDEAS
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Please, donâ??t tell me what you earn
    by Ariel Goldring in Free Market Mojo on 2010-03-14 10:42:38
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Werner, Peter & Bolton, Gary & Ockenfels, Axel, 2013. "How managerial wage transparency may reduce shareholder returns Evidence from an experiment," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79766, Verein für Socialpolitik / German Economic Association.
  2. Gächter, Simon & Thöni, Christian, 2010. "Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 531-543, December.
  3. Ghazala Azmat & Nagore Iriberri, 2010. "The provision of relative performance feedback information: An experimental analysis of performance and happiness," Economics Working Papers 1216, Department of Economics and Business, Universitat Pompeu Fabra.
  4. David Masclet & Emmanuel Peterle & Sophie Larribeau, 2012. "Gender Differences in Competitive and Non Competitive Environments: An Experimental Evidence," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201236, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  5. Schröder, Melanie & Schmitt, Norma & Heynemann, Britta & Brünn, Claudia, 2013. "Income Taxation and Labor Supply: An Experiment on Couple's Work Effort," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79735, Verein für Socialpolitik / German Economic Association.
  6. Anat Bracha & Uri Gneezy, 2012. "Relative pay and labor supply," Working Papers 12-6, Federal Reserve Bank of Boston.

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