Published In

Games

Document Type

Article

Publication Date

2020

Subjects

Wage Rates -- economics

Abstract

Wage rates, efficiency wages, and gift exchange in a labor market are all crucial aspects in regard to designing contracts to ensure high effort from workers. We extend this literature by discussing the relationship between known differences in wages (social comparison) and workers’ effort provision. We conduct an experiment in which subjects perform effort tasks for piece-rates. All subjects are paid the same wage rate in the first half of the experiment, but in the second half are paid different wage rates; the primary variable we study is the information about others’ wage rates given to a subset of subjects. We find that subjects’ efforts respond strongly to information about others’ wages. Such findings have implications for contract structuring for workers.

Rights

Copyright (c) 2020 The Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Locate the Document

https://doi.org/10.3390/g11040059

DOI

10.3390/g11040059

Persistent Identifier

https://archives.pdx.edu/ds/psu/34546

Included in

Economics Commons

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