IDEAS home Printed from https://ideas.repec.org/p/ent/wpaper/wp70.html
   My bibliography  Save this paper

Shared social responsibility and fair worker wages: evidence from an experimental market

Author

Listed:
  • Giacomo Degli Antoni

    (University of Parma, Department of Law)

  • Marco Faillo

    (University of Trento)

Abstract

We analyze repeated interactions occurring between workers, sellers and consumers within the framework of an experimental market. By successfully performing a task, workers allow sellers to offer a good through a market. Sellers set the price of goods and decide the wages of workers. Consumers enter the market sequentially and decide whether to accept one of the offers or to leave the market. Our data show that, especially in the first periods of the experiment, some sellers opt to pay high wages to their workers. However, this behavior is not rewarded by consumers, whose purchasing choices are almost exclusively driven by self- interest. This exposes sellers to a high level of price competition and, period after period, the propensity to act in a socially responsible way towards workers vanishes, creating a market scenario in which workers receive the minimum wage and where consumer surplus is significantly higher than those of workers and sellers. This result does not change when we manipulate the social distance between workers and consumers or when we limit opportunities for consumers to relinquish responsibility by avoiding information on workers’ conditions.

Suggested Citation

  • Giacomo Degli Antoni & Marco Faillo, 2019. "Shared social responsibility and fair worker wages: evidence from an experimental market," Econometica Working Papers wp70, Econometica.
  • Handle: RePEc:ent:wpaper:wp70
    as

    Download full text from publisher

    File URL: http://econometica.it/wp/wp70.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Frohlich, Norman & Oppenheimer, Joe, 1998. "Some consequences of e-mail vs. face-to-face communication in experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 35(3), pages 389-403, April.
    2. Sen, Amaryta, 1999. "On Ethics and Economics," OUP Catalogue, Oxford University Press, number 9780195627619.
    3. Björn Bartling & Roberto A. Weber & Lan Yao, 2015. "Do Markets Erode Social Responsibility?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 219-266.
    4. repec:hal:pseose:halshs-01157487 is not listed on IDEAS
    5. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-660, June.
    6. Thomas Piketty, 2015. "About Capital in the Twenty-First Century," American Economic Review, American Economic Association, vol. 105(5), pages 48-53, May.
    7. Rankin, Frederick W., 2006. "Requests and social distance in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 27-36, May.
    8. Vasileiou, Efi & Georgantzís, Nikolaos, 2015. "An experiment on energy-saving competition with socially responsible consumers: Opening the black box," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 1-10.
    9. Russell Golman & David Hagmann & George Loewenstein, 2017. "Information Avoidance," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 96-135, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark Pigors & Bettina Rockenbach, 2016. "Consumer Social Responsibility," Management Science, INFORMS, vol. 62(11), pages 3123-3137, November.
    2. Rockenbach, Bettina & Pigors, Mark, 2015. "Consumer Social Responsibility," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113139, Verein für Socialpolitik / German Economic Association.
    3. Natalia Montinari & Michela Rancan, 2013. "Social preferences under risk : the role of social distance," RSCAS Working Papers 2013/90, European University Institute.
    4. Leonardo Becchetti & Giacomo Degli Antoni & Marco Faillo, 2013. "Team reasoning theory: an experimental analysis of common reason to believe and social distance," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(3), pages 269-291, September.
    5. Leonardo Becchetti & Giacomo Degli Antoni & Marco Faillo & Luigi Mittone, 2011. "The economic value of a meeting: Evidence from an investment game experiment," Rationality and Society, , vol. 23(4), pages 403-426, November.
    6. Natalia Montinari & Michela Rancan, 2018. "Risk taking on behalf of others: The role of social distance," Journal of Risk and Uncertainty, Springer, vol. 57(1), pages 81-109, August.
    7. Li, Sherry Xin & Wang, Shengzhe & Yang, Shuo, 2023. "What is in Local Dialects? A Field Experiment on Social Distance and Human Capital Development in Job Training," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    8. Mario Biggeri & Domenico Colucci & Nicola Doni & Vincenzo Valori, 2021. "Good deeds, business, and social responsibility in a market experiment," Working Papers - Economics wp2021_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    9. Takanori Ida & Kazuhito Ogawa, 2012. "Inequality aversion, social discount, and time discount rates," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(5), pages 314-329, April.
    10. Jannis Engel & Nora Szech, 2020. "A little good is good enough: Ethical consumption, cheap excuses, and moral self-licensing," PLOS ONE, Public Library of Science, vol. 15(1), pages 1-19, January.
    11. Chapkovski, Philipp, 2022. "Information avoidance in a polarized society," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    12. Brosig, Jeannette, 2006. "Communication channels and induced behavior," MPRA Paper 14035, University Library of Munich, Germany.
    13. Ogawa, Kazuhito & Takemoto, Toru & Takahashi, Hiromasa & Suzuki, Akihiro, 2012. "Income earning opportunity and work performance affect donating behavior: Evidence from dictator game experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 816-826.
    14. Bruttel, Lisa & Stolley, Florian, 2020. "Getting a yes. An experiment on the power of asking," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 86(C).
    15. Alexander Morell, 2014. "The Short Arm of Guilt: Guilt Aversion Plays Out More Across a Short Social Distance," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2014_19, Max Planck Institute for Research on Collective Goods, revised Dec 2016.
    16. Mohlin, Erik & Johannesson, Magnus, 2008. "Communication: Content or relationship?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 409-419, March.
    17. Andreoni, James & Rao, Justin M., 2011. "The power of asking: How communication affects selfishness, empathy, and altruism," Journal of Public Economics, Elsevier, vol. 95(7), pages 513-520.
    18. Mario Biggeri & Domenico Colucci & Nicola Doni & Vincenzo Valori, 2022. "Sustainable Entrepreneurship: Good Deeds, Business, Social and Environmental Responsibility in a Market Experiment," Sustainability, MDPI, vol. 14(6), pages 1-20, March.
    19. Nejat Anbarci & Nick Feltovich, 2013. "How responsive are people to changes in their bargaining position? Earned bargaining power and the 50–50 norm," EcoMod2013 5855, EcoMod.
    20. Katharina Momsen & Markus Ohndorf, 2023. "Expressive voting versus information avoidance: experimental evidence in the context of climate change mitigation," Public Choice, Springer, vol. 194(1), pages 45-74, January.

    More about this item

    Keywords

    social responsibility; experimental market; consumers’ behavior; reciprocity; social distance; information avoidance;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ent:wpaper:wp70. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Matteo Rizzolli (email available below). General contact details of provider: https://edirc.repec.org/data/ecoetit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.