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Incomplete and Asymmetric Surplus Information in Labor Relations

Author

Listed:
  • Hennig-Schmidt, H.
  • Rockenbach, B.
  • Sadrieh, A.

    (Tilburg University, School of Economics and Management)

Abstract

Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower or absent when the information is incomplete. We report a laboratory experiment with symmetric and asymmetric incomplete surplus information in a “bilateral gift exchange” setting. We find that trust and reciprocity have a significant positive effect on wages, effort and efficiency. But, all three are substantially lower under incomplete than under complete information. The negative impact on wages and efficiency is even greater with information asymmetry.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Hennig-Schmidt, H. & Rockenbach, B. & Sadrieh, A., 2003. "Incomplete and Asymmetric Surplus Information in Labor Relations," Other publications TiSEM e9188c19-08a5-41ad-8bbe-b, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:e9188c19-08a5-41ad-8bbe-b44650cd413a
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    References listed on IDEAS

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    Cited by:

    1. Işgın, Ebru & Sopher, Barry, 2015. "Information transparency, fairness and labor market efficiency," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 33-39.

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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