In this paper we compare - in the laboratory - stoppage and virtual strike. Our experiment confirms that higher wages offered by an employer lead to considerably more costly effort provision. The number of strikes, the level of efforts and average total payoffs are higher under virtual strike than under standard strike. However, when standard strike is associated with reciprocal externalities, it induces higher effort levels, higher payoffs and an extremely reduced number of strikes than virtual strike. It is unclear whether this behavior re?ects reciprocity or other forms of social preferences. However our results might explain why standard strikes rather than virtual ones are generally adopted by workers.
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Ernst Fehr & Alexander Klein & Klaus M Schmidt, 2007.
"Fairness and Contract Design,"
Econometrica,
Econometric Society, vol. 75(1), pages 121-154, 01.
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Ernst Fehr & Alexander Klein & Klaus M. Schmidt, 2005.
"Fairness and Contract Design,"
Discussion Papers
67, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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