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Social comparisons in wage delegation: Experimental evidence

  • Charness, Gary
  • Cobo-Reyes, Ramon
  • Lacomba, Juan A
  • Lagos, Francisco
  • Perez, Jose M

Abstract We make two main contributions in this article. We examine whether social comparisons affects workers’ performance when a firm can choose workers’ wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning both wages and decision rights affect workers’ performance. Our second contribution is methodological. We find that our treatment effects are present with both stated effort and a real-effort task, which suggests that both approaches may yield similar results in labor experiments.

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt8j55h1xj.

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Date of creation: 13 Jul 2013
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Handle: RePEc:cdl:ucsbec:qt8j55h1xj
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