Discretion, Productivity and Work Satisfaction
In Bartling, Fehr and Schmidt (2012) we show theoretically and experimentally that it is optimal to grant discretion to workers if (i) discretion increases productivity, (ii) workers can be screened by past performance, (iii) some workers reciprocate high wages with high effort and (iv) employers pay high wages leaving rents to their workers. In this paper we show experimentally that the productivity increase due to discretion is not only sufficient but also necessary for the optimality of granting discretion to workers. Furthermore, we report representative survey evidence on the impact of discretion on workersâ€™ welfare, confirming that workers earn rents.
|Date of creation:||Jun 2012|
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- Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 1993.
"Does Fairness Prevent Market Clearing? An Experimental Investigation,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 108(2), pages 437-459.
- 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.
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