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Do discriminatory pay regimes unleash antisocial behavior?

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  • Grosch, Kerstin
  • Rau, Holger A.

Abstract

In this paper, we analyze how pay-regime procedures affect antisocial behavior at the workplace. In a real-effort experiment we vary two determinants of pay regimes: discrimination and justification of payments by performance. In our Discrimination treatment half of the workforce is randomly selected and promoted and participate in a tournament (high-income workers) whereas the other half receives no payment (lowincome workers). Afterwards, antisocial behavior is measured by a Joy-of-Destruction game where participants can destroy canteen vouchers. The data show that low-income workers destroy significantly more vouchers than high-income workers. Destruction behavior is driven by workers who receive payments that are not justified by performance. When all payments are justified, that is in our Competition treatment where all workers participate in a tournament, the difference vanishes. By using a treatment with random payments, we show that unjustifiably-paid workers destroy less when they had equal opportunities to receive a high payment, i.e., when they were not discriminated by the pay regime.

Suggested Citation

  • Grosch, Kerstin & Rau, Holger A., 2017. "Do discriminatory pay regimes unleash antisocial behavior?," Center for European, Governance and Economic Development Research Discussion Papers 315, University of Goettingen, Department of Economics.
  • Handle: RePEc:zbw:cegedp:315
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    References listed on IDEAS

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    21. repec:eee:joepsy:v:62:y:2017:i:c:p:258-267 is not listed on IDEAS
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    Cited by:

    1. Grosch, Kerstin & Ibanez, Marcela & Viceisza, Angelino, 2017. "Competition and prosociality: A field experiment in Ghana," GlobalFood Discussion Papers 266141, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    2. Schmidt, Robert J. & Trautmann, Stefan, 2019. "Implementing (Un)fair Procedures? Favoritism and Process Fairness when Inequality is Inevitable," Discussion Paper 201-013, Tilburg University, Center for Economic Research.
    3. Dickinson, David L. & Masclet, David & Peterle, Emmanuel, 2018. "Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market," European Economic Review, Elsevier, vol. 104(C), pages 220-236.
    4. repec:eee:joepsy:v:62:y:2017:i:c:p:258-267 is not listed on IDEAS
    5. Benndorf, Volker & Rau, Holger A. & Sölch, Christian, 2018. "Minimizing learning behavior in repeated real-effort tasks," Center for European, Governance and Economic Development Research Discussion Papers 343, University of Goettingen, Department of Economics.
    6. repec:eee:gamebe:v:107:y:2018:i:c:p:123-134 is not listed on IDEAS

    More about this item

    Keywords

    antisocial behavior; discrimination; experiment; joy of destruction;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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