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Wage dispersion and workers? effort

  • Maria Fernanda Rivas


  • Matthias Sutter


We study experimentally the relationship between intra-firm wage dispersion chosen by principals and workers' performance. Principals show a preference for more egalitarian wage schemes, and workers are negatively influenced by high levels of wage inequality.

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Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2008-15.

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Length: 12
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:inn:wpaper:2008-15
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  1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  2. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  3. Andrew E. Clark & David Masclet & Marie Claire Villeval, 2006. "Effort and comparison income: Survey and experimental evidence," PSE Working Papers halshs-00590552, HAL.
  4. Georg Kirchsteiger & Ernst Fehr & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," ULB Institutional Repository 2013/5927, ULB -- Universite Libre de Bruxelles.
  5. Ernst Fehr & Simon G�chter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
  6. repec:oup:qjecon:v:97:y:1982:i:4:p:543-69 is not listed on IDEAS
  7. Fernanda Rivas, 2009. "Wage dispersion and workers` effort," Economics Bulletin, AccessEcon, vol. 29(2), pages 788-794.
  8. repec:oup:qjecon:v:105:y:1990:i:2:p:255-83 is not listed on IDEAS
  9. Gary Charness & Peter Kuhn, 2007. "Does Pay Inequality Affect Worker Effort? Experimental Evidence," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 693-723.
  10. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  11. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  12. Werner Güth & Manfred Königstein & Judit Kovács & Enikõ Zala-Mezõ, 2001. "Fairness Within Firms: The Case Of One Principal And Multiple Agents," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 53(2), pages 82-101, April.
  13. repec:oup:qjecon:v:108:y:1993:i:2:p:437-59 is not listed on IDEAS
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