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Setting the scene with 'firms' and 'workers'

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  • Fredrik Hansen

Abstract

Two articles contributing to the experimental research about incomplete contracts are analyzed in this paper. Especially interesting is their use of the terms 'firms' and 'workers', although the experiments were performed on students only given information that they were participating in general market experiments. A framework based on Maki (2004) is used both to emphasize what we aim to explain, and by which we explain. Also the concepts of internal and external validity are important. By showing that the articles refer to an external validity which they are not capable of achieving at this moment, their use of 'firms' and 'workers' is found to be questionable. But the two articles are still good examples of experimental research about incomplete contracts.

Suggested Citation

  • Fredrik Hansen, 2007. "Setting the scene with 'firms' and 'workers'," Journal of Economic Methodology, Taylor & Francis Journals, vol. 14(3), pages 339-352.
    • Handle: RePEc:taf:jecmet:v:14:y:2007:i:3:p:339-352
    DOI: 10.1080/13501780701562526
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    References listed on IDEAS

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    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
    3. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    4. Agell, Jonas, 1999. "On the Benefits from Rigid Labour Markets: Norms, Market Failures, and Social Insurance," Economic Journal, Royal Economic Society, vol. 109(453), pages 143-164, February.
    5. Martin Brown & Armin Falk & Ernst Fehr, "undated". "Contractual Incompleteness and the Nature of Market Interactions," IEW - Working Papers 038, Institute for Empirical Research in Economics - University of Zurich.
    6. Nicholas Bardsley, 2005. "Experimental economics and the artificiality of alteration," Journal of Economic Methodology, Taylor & Francis Journals, vol. 12(2), pages 239-251.
    7. Uri Gneezy & John A List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," Econometrica, Econometric Society, vol. 74(5), pages 1365-1384, September.
    8. van Dijk, Frans & Sonnemans, Joep & van Winden, Frans, 2001. "Incentive systems in a real effort experiment," European Economic Review, Elsevier, vol. 45(2), pages 187-214, February.
    9. Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2007. "Estimating Risk Attitudes in Denmark: A Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(2), pages 341-368, June.
    10. Uskali Mäki, 2004. "Theoretical isolation and explanatory progress: transaction cost economics and the dynamics of dispute," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(3), pages 319-346, May.
    11. Fahr, Rene & Irlenbusch, Bernd, 2000. "Fairness as a constraint on trust in reciprocity: earned property rights in a reciprocal exchange experiment," Economics Letters, Elsevier, vol. 66(3), pages 275-282, March.
    12. Falk, Armin & Fehr, Ernst, 2003. "Why labour market experiments?," Labour Economics, Elsevier, vol. 10(4), pages 399-406, August.
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    Cited by:

    1. Ohana, Marc, 2009. "La réciprocité sur le marché du travail : les limites du laboratoire," L'Actualité Economique, Société Canadienne de Science Economique, vol. 85(2), pages 239-256, juin.

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    More about this item

    Keywords

    economic methodology; experimental economics; external validity; labor experiments; B41; C90;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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