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Information Transparency, Fairness and Labor Market Efficiency

  • Ebru Isgin

    ()

    (West Chester University)

  • Barry Sopher

    ()

    (Rutgers University)

The paper studies the role of information transparency on fairness concerns, welfare and efficiency. When the firm's productivity and ultimately profits are revealed, wage offers induce relatively fair divisions of potential gains and workers respond with higher performance. Workers respond not only to wages but also to firms' intentions concerning fairness. Information transparency serves as a mechanism that promotes fairness and performance while the lack of transparency results in reduced earnings for workers and market inefficiency.

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File URL: http://www.sas.rutgers.edu/virtual/snde/wp/2013-03.pdf
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Paper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 201303.

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Length: 20 pages
Date of creation: 18 Jan 2013
Date of revision:
Handle: RePEc:rut:rutres:201303
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