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Social comparisons in wage delegation: Experimental evidence

Author Info

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

Abstract

This article examines whether social comparisons have behavioral effects on 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. Moreover, the relative effect of discrimination in relation to decision rights is larger than in relation to wage. We find these treatment effects with both stated effort and a real-effort task, suggesting that both approaches may yield similar results.

(This abstract was borrowed from another version of this item.)

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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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Keywords: Social and Behavioral Sciences;

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Find related papers by JEL classification:
  • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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Cited by:

  1. Sabrina Jeworrek & Vanessa Mertins, 2014. "When Pay Increases are Not Enough: The Economic Value of Wage Delegation in the Field," IAAEU Discussion Papers 201408, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  2. Dodonova, Anna & Khoroshilov, Yuri, 2014. "Compensation and performance: An experimental study," Economics Letters, Elsevier, vol. 124(2), pages 304-307.

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