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Other-Regarding Preferences with Peer Workers in Labor Markets: An Experimental Investigation

  • Mark F. Owens

A peer worker is introduced in a controlled labor market experiment characterized by unobservable effort and incomplete contracts. Workers make decisions independently and without knowledge of each others’ actions in a modified gift exchange experiment. Introducing a peer worker into an ongoing market has a negative and significant effect on effort provided in contrast to prior experimental studies of peer effects which find positive effects with observable effort. This decrease in effort is not driven by other-regarding equity concerns for the manager’s payoffs.

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File URL: http://capone.mtsu.edu/berc/working/ORPwP.pdf
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Paper provided by Middle Tennessee State University, Department of Economics and Finance in its series Working Papers with number 201008.

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Date of creation: Apr 2010
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Handle: RePEc:mts:wpaper:201008
Contact details of provider: Web page: http://www.mtsu.edu/~berc/working/Economics_Working_Papers.html
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  9. Sebastian Kube & Michel Andre Marechal & Clemens Puppe, 2012. "The Currency of Reciprocity: Gift Exchange in the Workplace," American Economic Review, American Economic Association, vol. 102(4), pages 1644-62, June.
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  14. Fehr, Ernst & Schmidt, Klaus M., 2006. "The Economics of Fairness, Reciprocity and Altruism - Experimental Evidence and New Theories," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
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  18. Imran Rasul & Iwan Barankay & Orana Bandiera, 2005. "Social preferences and the response to incentives: Evidence from personnel data," Natural Field Experiments 00212, The Field Experiments Website.
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