Are efficiency wages equality wages? Exogenously induced fairness norms in working environments
AbstractWe investigate how the introduction of a salient norm for pay differentiation influences wage offers and effort exertion in a gift exchange experiment. Exogenously induced claims indeed lead to substantial differentiation in wages. At the same time, unequal wage schemes do not crowd out effort exertion. In particular, we do not observe strong detrimental effects resulting from disadvantageous relative wage positions. Finally, we find that specific communication patterns have a significant impact on effort exertion.
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Bibliographic InfoPaper provided by University of Cologne, Department of Economics in its series Working Paper Series in Economics with number 56.
Date of creation: 03 Aug 2012
Date of revision:
Communication; entitlements; fairness norms; gift exchange; relative wages;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-CBE-2012-08-23 (Cognitive & Behavioural Economics)
- NEP-EXP-2012-08-23 (Experimental Economics)
- NEP-HRM-2012-08-23 (Human Capital & Human Resource Management)
- NEP-LAB-2012-08-23 (Labour Economics)
- NEP-LMA-2012-08-23 (Labor Markets - Supply, Demand, & Wages)
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.:
- Dirk Sliwka, 2007.
"Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes,"
American Economic Review,
American Economic Association, vol. 97(3), pages 999-1012, June.
- Sliwka, Dirk, 2006. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," IZA Discussion Papers 2293, Institute for the Study of Labor (IZA).
- Rankin, Frederick W., 2006. "Requests and social distance in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 27-36, May.
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