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Wage transparency and performance: A real-effort experiment

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Author Info

  • 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

Related research

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

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References

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  1. Ernst Fehr & Lorenz Goette & Christian Zehnder, 2008. "A behavioral account of the labor market: the role of fairness concerns," IEW - Working Papers 394, Institute for Empirical Research in Economics - University of Zurich.
  2. Andrew E. Clark & David Masclet & Marie-Claire Villeval, 2008. "Effort and comparison income: experimental and survey evidence," LSE Research Online Documents on Economics 28502, London School of Economics and Political Science, LSE Library.
  3. 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.
  4. 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.
  5. List, John A. & Rasul, Imran, 2011. "Field Experiments in Labor Economics," Handbook of Labor Economics, Elsevier.
  6. 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.
  7. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  8. Fernanda Rivas, 2009. "Wage dispersion and workers` effort," Economics Bulletin, AccessEcon, vol. 29(2), pages 788-794.
  9. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
  10. Gary Charness & Peter J. Kuhn, 2010. "Lab Labor: What Can Labor Economists Learn from the Lab?," NBER Working Papers 15913, National Bureau of Economic Research, Inc.
  11. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2010. "Bonus Payments and Reference Point Violations," IZA Discussion Papers 4795, Institute for the Study of Labor (IZA).
  12. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  13. Simon Gaechter & Christian Thoeni, 2009. "Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis," Discussion Papers 2009-23, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  14. Uri Gneezy & John A. List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," NBER Working Papers 12063, National Bureau of Economic Research, Inc.
  15. 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.
  16. Frank, Robert H, 1984. "Are Workers Paid Their Marginal Products?," American Economic Review, American Economic Association, vol. 74(4), pages 549-71, September.
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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
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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. Anat Bracha & Uri Gneezy, 2012. "Relative pay and labor supply," Working Papers 12-6, Federal Reserve Bank of Boston.

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