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Wage transparency and performance: A real-effort experiment

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  • 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.

Suggested Citation

  • Greiner, Ben & Ockenfels, Axel & Werner, Peter, 2011. "Wage transparency and performance: A real-effort experiment," Economics Letters, Elsevier, vol. 111(3), pages 236-238, June.
  • Handle: RePEc:eee:ecolet:v:111:y:2011:i:3:p:236-238
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    References listed on IDEAS

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    2. Gächter, Simon & Thöni, Christian, 2010. "Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 531-543, December.
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    Citations

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    Cited by:

    1. Ghazala Azmat & Nagore Iriberri, 2010. "The Provision of Relative Performance Feedback Information: An Experimental Analysis of Performance and Happiness," Working Papers 454, Barcelona Graduate School of Economics.
    2. Haigner Stefan & Höchtl Wolfgang & Schneider Friedrich Georg & Wakolbinger Florian & Jenewein Stefan, 2012. "Keep On Working: Unconditional Basic Income in the Lab," Basic Income Studies, De Gruyter, vol. 7(1), pages 1-14, December.
    3. Anat Bracha & Uri Gneezy & George Loewenstein, 2015. "Relative Pay and Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 297-315.
    4. Brandes, Leif & Franck, Egon, 2012. "Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 925-939.
    5. Lagarde, Mylène & Blaauw, Duane, 2017. "Physicians’ responses to financial and social incentives: A medically framed real effort experiment," Social Science & Medicine, Elsevier, vol. 179(C), pages 147-159.
    6. Gächter, Simon & Thöni, Christian, 2010. "Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 531-543, December.
    7. Dolan, Paul & Galizzi, Matteo M. & Navarro-Martinez, Daniel, 2015. "Paying people to eat or not to eat? Carryover effects of monetary incentives on eating behaviour," Social Science & Medicine, Elsevier, vol. 133(C), pages 153-158.
    8. Gary Bolton & Axel Ockenfels & Peter Werner, 2016. "Leveraging social relationships and transparency in the insider game," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 2(2), pages 127-143, November.
    9. repec:iza:izawol:journl:2017:n:367 is not listed on IDEAS
    10. Schröder, Melanie & Schmitt, Norma & Heynemann, Britta & Brünn, Claudia, 2013. "Income Taxation and Labor Supply: An Experiment on Couple's Work Effort," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79735, Verein für Socialpolitik / German Economic Association.
    11. Bracha, Anat, 2016. "Relative pay, productivity, and labor supply," Current Policy Perspectives 17-2, Federal Reserve Bank of Boston.
    12. Marco Kleine & Sebastian Kube, 2015. "Communication and Trust in Principal-Team Relationships: Experimental Evidence," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_06, Max Planck Institute for Research on Collective Goods.
    13. Paul Dolan & Matteo M. Galizzi, 2014. "Because I'm Worth It: A Lab-Field Experiment on the Spillover Effects of Incentives in Health," CEP Discussion Papers dp1286, Centre for Economic Performance, LSE.
    14. Bol, Jasmijn C. & Kramer, Stephan & Maas, Victor S., 2016. "How control system design affects performance evaluation compression: The role of information accuracy and outcome transparency," Accounting, Organizations and Society, Elsevier, vol. 51(C), pages 64-73.
    15. Tao, Hung-Lin, 2015. "Multiple earnings comparisons and subjective earnings fairness: A cross-country study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 45-54.
    16. 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.
    17. Aurélie BONEIN, 2014. "Social Comparison and Peer effects with Heterogeneous Ability," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201411, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    18. Dolan, Paul & Galizzi, Matteo M., 2015. "Like ripples on a pond: Behavioral spillovers and their implications for research and policy," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 1-16.
    19. Gary Bolton & Peter Werner, 2016. "The influence of potential on wages and effort," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 535-561, September.
    20. Kajackaite, Agne & Werner, Peter, 2015. "The incentive effects of performance requirements – A real effort experiment," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 84-94.
    21. Schröder, Melanie & Schmitt, Norma & Mantei, Britta & Brünn, Claudia, 2014. "Social Norms or Income Taxation - What Drives Couple's Labor Supply? Experimental Evidence," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100375, Verein für Socialpolitik / German Economic Association.
    22. David Masclet & Emmanuel Peterle & Sophie Larribeau, 2012. "Gender Differences in Competitive and Non Competitive Environments: An Experimental Evidence," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201236, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    23. repec:eee:gamebe:v:107:y:2018:i:c:p:182-202 is not listed on IDEAS

    More about this item

    Keywords

    Labor market experiments Real effort Social comparison Wage schemes;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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