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Social comparisons in wage delegation: Experimental evidence

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

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.

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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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  1. 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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