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When Social Forces Remove the Impact of Competition. Social Exchange in Experimental Labor Markets

Author

Listed:
  • Fehr, Ernst

    (Institute for Empirical Economic Research, University of Z├╝rich)

  • Kirchler, Erich

    (Institute of Psychology, Department of Applied Psychology, University of Vienna)

  • Weichbold, Andreas

    (Department of Economics, Institute for Advanced Studies, Vienna)

Abstract

Do competitive markets remove the impact of social norms and customs on market out-comes? Or are these social forces capable of exerting a persistent influence? Many economists seem to believe that social norms and customs have, if at all, only temporary effects in competitive markets. So far this belief has been confirmed by the evidence of many competitive market experiments. In this paper we report the results of a series of competitive market and bilateral bargaining experiments. They indicate that social norms may not only persist in a competitive environment but that they may completely remove the impact of competition on the market outcome.

Suggested Citation

  • Fehr, Ernst & Kirchler, Erich & Weichbold, Andreas, 1995. "When Social Forces Remove the Impact of Competition. Social Exchange in Experimental Labor Markets," Economics Series 8, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:8
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    File URL: http://www.ihs.ac.at/publications/eco/es-8.pdf
    File Function: First version, 1995
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    More about this item

    Keywords

    Competition; Social Exchange; Trust; Reciprocity; Social Norms;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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