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Social comparisons in job search

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  • Fu, Jingcheng
  • Sefton, Martin
  • Upward, Richard

Abstract

Using a laboratory experiment we examine how social comparisons affect behavior in a sequential search task. In a control treatment subjects search in isolation, while in two other treatments subjects get feedback on the search decisions and outcomes of a partner subject. The average level and rate of decline of reservation wages are similar across treatments. Nevertheless, subjects who are able to make social comparisons search differently from those who search in isolation. Within a search task we observe a reference wage effect: when a partner exits, the subject chooses a new reservation wage which is increasing in partner income. We also observe a social comparison effect between search tasks: subjects whose partners in a previous task searched for longer choose a higher reservation wage in the next task. Our findings imply that the provision of social information can change job-seekers search behavior.

Suggested Citation

  • Fu, Jingcheng & Sefton, Martin & Upward, Richard, 2019. "Social comparisons in job search," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 338-361.
  • Handle: RePEc:eee:jeborg:v:168:y:2019:i:c:p:338-361
    DOI: 10.1016/j.jebo.2019.10.013
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    More about this item

    Keywords

    Job search; Social comparisons; Distributional preferences; Laboratory experiment;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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