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Workers’ participation in wage setting: A gift-exchange experiment

Listed author(s):
  • Franke, Jörg
  • Gurtoviy, Ruslan
  • Mertins, Vanessa

This study analyzes the consequences of workers’ participation in the wage setting process on effort exertion. The experimental design is based on a modified gift-exchange game with firms specifying contract alternatives and workers deciding about the finally implemented alternative. The experimental data reveals that workers with participation rights are more sensitive to differences in wage offers: Low wage offers trigger negative reciprocity which dominates the positive incentive effects from high wage offers. On average, participation in the wage setting process leads to a decline in effort exertion.

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File URL: http://www.sciencedirect.com/science/article/pii/S016748701630407X
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Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 56 (2016)
Issue (Month): C ()
Pages: 151-162

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Handle: RePEc:eee:joepsy:v:56:y:2016:i:c:p:151-162
DOI: 10.1016/j.joep.2016.07.002
Contact details of provider: Web page: http://www.elsevier.com/locate/joep

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