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Information Transparency, Fairness and Labor Market Efficiency

Author

Listed:
  • Ebru Isgin

    () (West Chester University)

  • Barry Sopher

    () (Rutgers University)

Abstract

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.

Suggested Citation

  • Ebru Isgin & Barry Sopher, 2013. "Information Transparency, Fairness and Labor Market Efficiency," Departmental Working Papers 201303, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:201303
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    References listed on IDEAS

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    More about this item

    Keywords

    Experiments; Incomplete Contracts; Fairness; Information Transparency;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J - Labor and Demographic Economics

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