Advanced Search
MyIDEAS: Login to save this paper or follow this series

Do Legal Standards Affect Ethical Concerns of Consumers?

Contents:

Author Info

  • Engelmann, Dirk

    ()
    (Royal Holloway, University of London)

  • Kübler, Dorothea

    ()
    (WZB - Social Science Research Center Berlin)

Abstract

In order to address the impact of regulation on ethical concerns of consumers, we study the effect of a minimum wage. In our experimental market, consumers have monopsony power, firms engage in Bertrand competition, and workers are passive recipients of a wage payment. Two treatments are employed, one with no minimum wage in the first part but with a minimum wage in the second part, and one treatment with a minimum wage at the outset that is abolished in the second part. In both treatments, wages decrease over time in the first part even though some consumers show an interest in fair wages. If a minimum wage is in place, wages decline even faster. Introducing a minimum wage in a mature market raises average wages, while abolishing it lowers them. We discuss the implications of our results, such as the crowding out of ethical behavior through legal regulation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp3266.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3266.

as in new window
Length: 36 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3266

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: fairness; crowding out; consumer behavior; minimum wage; experimental economics;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Werner Güth & Carsten Schmidt & Matthias Sutter, 2005. "Bargaining Outside the Lab – A Newspaper Experiment of a Three-Person Ultimatum Game," Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group 2002-11, Max Planck Institute of Economics, Strategic Interaction Group.
  2. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(1), pages 1-22, January.
  3. Glenn W Harrison & Laurie T Johnson, 2004. "Identifying Altruism in the Laboratory," Levine's Working Paper Archive 122247000000000176, David K. Levine.
  4. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, American Economic Association, vol. 96(5), pages 1611-1630, December.
  5. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
  6. Ingrid Seinen & Arthur Schram, 2001. "Social Status and Group Norms," Tinbergen Institute Discussion Papers 01-003/1, Tinbergen Institute.
  7. Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(436), pages 639-49, May.
  8. David Card, 1992. "Do minimum wages reduce employment? A case study of California, 1987û1989," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 38-54, October.
  9. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 14(3), pages 137-158, Summer.
  10. M.A. Nowak & K. Sigmund, 1998. "Evolution of Indirect Reciprocity by Image Scoring/ The Dynamics of Indirect Reciprocity," Working Papers, International Institute for Applied Systems Analysis ir98040, International Institute for Applied Systems Analysis.
  11. Kritikos, Alexander & Bolle, Friedel, 2001. "Distributional concerns: equity- or efficiency-oriented?," Economics Letters, Elsevier, Elsevier, vol. 73(3), pages 333-338, December.
  12. Dirk Engelmann & Urs Fischbacher, 2008. "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," TWI Research Paper Series, Thurgauer Wirtschaftsinstitut, Universität Konstanz 34, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
  13. Lawrence Katz & Alan Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 678, Princeton University, Department of Economics, Industrial Relations Section..
  14. Seinen, Ingrid & Schram, Arthur, 2006. "Social status and group norms: Indirect reciprocity in a repeated helping experiment," European Economic Review, Elsevier, Elsevier, vol. 50(3), pages 581-602, April.
  15. Jordi Brandts & Gary Charness, 2004. "Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(497), pages 684-708, 07.
  16. Martin Dufwenberg & Uri Gneezy & Jacob Goeree & Rosemarie Nagel, 2007. "Price floors and competition," Economic Theory, Springer, Springer, vol. 33(1), pages 211-224, October.
  17. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 15(5), pages 589-611, December.
  18. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 115(3), pages 791-810, August.
  19. repec:fth:prinin:298 is not listed on IDEAS
  20. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences With Simple Tests," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(3), pages 817-869, August.
  21. Engelmann,Dirk & Strobel,Martin, 2002. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 015, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  22. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  23. Falk, Armin & Fehr, Ernst & Zehnder, Christian, 2005. "The Behavioural Effects of Minimum Wages," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5115, C.E.P.R. Discussion Papers.
  24. Uri Gneezy & Aldo Rustichini, 2000. "A fine is a price," Natural Field Experiments, The Field Experiments Website 00258, The Field Experiments Website.
  25. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, Elsevier, vol. 6(3), pages 347-369, May.
  26. Ernst Fehr & Urs Fischbacher, 2004. "Third-party punishment and social norms," Experimental, EconWPA 0409002, EconWPA.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Stefan Bauernschuster & Jörg Oechssler & Peter Duersch & Radovan Vadovic, 2009. "Mandatory Sick Pay Provision: A Labor Market Experiment," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2009-076, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp3266. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.