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

Social Comparisons in Wage Delegation: Experimental Evidence

Contents:

Author Info

  • Charness, Gary

    ()
    (University of California, Santa Barbara)

  • Cobo-Reyes, Ramón

    ()
    (University of Essex)

  • Lacomba, Juan A.

    ()
    (Universidad de Granada)

  • Lagos, Francisco

    ()
    (Universidad de Granada)

  • Pérez, José María

    ()
    (Universidad de Granada)

Abstract

This article examines whether social comparisons have behavioral effects on workers' performance when a firm can choose workers' wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning both wages and decision rights affect workers' performance. Moreover, the relative effect of discrimination in relation to decision rights is larger than in relation to wage. We find these treatment effects with both stated effort and a real-effort task, suggesting that both approaches may yield similar results.

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/dp7802.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7802.

as in new window
Length: 45 pages
Date of creation: Dec 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7802

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: delegation; gift-exchange; experiment;

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. 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.
  2. Martin Brown & Armin Falk & Ernst Fehr, 2004. "Relational Contracts and the Nature of Market Interactions," Econometrica, Econometric Society, Econometric Society, vol. 72(3), pages 747-780, 05.
  3. Siang, Ch'ng Kean & Requate, Till & Waichman, Israel, 2011. "On the role of social wage comparisons in gift-exchange experiments," Economics Letters, Elsevier, vol. 112(1), pages 75-78, July.
  4. Bester, Helmut & Krähmer, Daniel, 2006. "Delegation and incentives," Discussion Papers 2007/1, Free University Berlin, School of Business & Economics.
  5. Fershtman, C. & Gneezy, U., 1997. "Strategic delegation: An experiment," Discussion Paper, Tilburg University, Center for Economic Research 1997-26, Tilburg University, Center for Economic Research.
  6. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2010. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," NBER Working Papers 16396, National Bureau of Economic Research, Inc.
  7. Johannes Abeler & Steffen Altmann & Sebastian Kube & Matthias Wibral, 2010. "Gift Exchange and Workers' Fairness Concerns: When Equality is Unfair," Journal of the European Economic Association, MIT Press, MIT Press, vol. 8(6), pages 1299-1324, December.
  8. Sandra Maximiano & Randolph Sloof & Joep Sonnemans, 2007. "Gift Exchange in a Multi-Worker Firm," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(522), pages 1025-1050, 07.
  9. Ernst Fehr & Holger Herz & Tom Wilkening, 2012. "The lure of authority: Motivation and incentive effects of power," UBSCENTER - Working Papers 002, UBS International Center of Economics in Society - Department of Economics - University of Zurich.
  10. Dohmen, Thomas & Falk, Armin, 2011. "Performance Pay and Multidimensional Sorting - Productivity, Preferences and Gender," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 360, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  11. Werner Güth & Manfred Königstein & Judit Kovács & Enikõ Zala-Mezõ, 2001. "Fairness Within Firms: The Case Of One Principal And Multiple Agents," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 53(2), pages 82-101, April.
  12. Simon Gaechter & Armin Falk, . "Reputation and Reciprocity: Consequences for the Labour Relation," IEW - Working Papers 019, Institute for Empirical Research in Economics - University of Zurich.
  13. Björn Bartling & Urs Fischbacher, 2008. "Shifting the Blame: On Delegation and Responsibility," IEW - Working Papers 380, Institute for Empirical Research in Economics - University of Zurich.
  14. Gary Charness & Ramon Cobo-Reyes & Natalia Jimenez & Juan A. Lacomba & Francisco Lagos, 2012. "The Hidden Advantage of Delegation: Pareto Improvements in a Gift Exchange Game," American Economic Review, American Economic Association, vol. 102(5), pages 2358-79, August.
  15. Dessein, Wouter, 2002. "Authority and Communication in Organizations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(4), pages 811-38, October.
  16. Bartling, Björn & von Siemens, Ferdinand A., 2011. "Wage inequality and team production: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 1-16, February.
  17. 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.
  18. Gary Charness & Peter Kuhn, 2007. "Does Pay Inequality Affect Worker Effort? Experimental Evidence," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 693-723.
  19. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(2), pages 255-83, May.
  20. Altmann, Steffen & Falk, Armin & Wibral, Matthias, 2008. "Promotions and Incentives: The Case of Multi-Stage Elimination Tournaments," IZA Discussion Papers 3835, Institute for the Study of Labor (IZA).
  21. Armin Falk & Michael Kosfeld, . "The Hidden Costs of Control," IEW - Working Papers 250, Institute for Empirical Research in Economics - University of Zurich.
  22. Georg Kirchsteiger & Ernst Fehr & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," ULB Institutional Repository 2013/5927, ULB -- Universite Libre de Bruxelles.
  23. Muriel Niederle & Lise Vesterlund, 2005. "Do Women Shy Away from Competition? Do Men Compete too Much?," Discussion Papers, Stanford Institute for Economic Policy Research 04-030, Stanford Institute for Economic Policy Research.
  24. Charness, Gary & Frechette, Guillaume R & Kagel, John H, 2002. "How Robust is Laboratory Gift Exchange?," University of California at Santa Barbara, Economics Working Paper Series qt8qq4k3ph, Department of Economics, UC Santa Barbara.
  25. Charness, Gary B, 2004. "Attribution And Reciprocity In An Experimental Labor Market," University of California at Santa Barbara, Economics Working Paper Series qt8rp6b18c, Department of Economics, UC Santa Barbara.
  26. Van den Steen, Eric, 2007. "The Limits of Authority: Motivation versus Coordination," Working papers 37305, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  27. Lucas C. Coffman, 2011. "Intermediation Reduces Punishment (and Reward)," American Economic Journal: Microeconomics, American Economic Association, vol. 3(4), pages 77-106, November.
  28. Frank, Robert H, 1984. "Are Workers Paid Their Marginal Products?," American Economic Review, American Economic Association, vol. 74(4), pages 549-71, September.
  29. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  30. Jan Zabojnik, 2002. "Centralized and Decentralized Decision Making in Organizations," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 20(1), pages 1-22, January.
  31. John R. Hamman & George Loewenstein & Roberto A. Weber, 2010. "Self-Interest through Delegation: An Additional Rationale for the Principal-Agent Relationship," American Economic Review, American Economic Association, vol. 100(4), pages 1826-46, September.
Full references (including those not matched with items on IDEAS)

Citations

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:dp7802. 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.