IDEAS home Printed from https://ideas.repec.org/p/kls/series/0056.html
   My bibliography  Save this paper

Are efficiency wages equality wages? Exogenously induced fairness norms in working environments

Author

Listed:
  • Gary Bolton
  • Peter Werner

Abstract

We investigate how the introduction of a salient norm for pay differentiation influences wage offers and effort exertion in a gift exchange experiment. Exogenously induced claims indeed lead to substantial differentiation in wages. At the same time, unequal wage schemes do not crowd out effort exertion. In particular, we do not observe strong detrimental effects resulting from disadvantageous relative wage positions. Finally, we find that specific communication patterns have a significant impact on effort exertion.

Suggested Citation

  • Gary Bolton & Peter Werner, 2012. "Are efficiency wages equality wages? Exogenously induced fairness norms in working environments," Working Paper Series in Economics 56, University of Cologne, Department of Economics.
    • Handle: RePEc:kls:series:0056
    as

    Download full text from publisher

    File URL: https://ockenfels.uni-koeln.de/fileadmin/wiso_fak/stawi-ockenfels/pdf/wp_series_download/wp0056.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dirk Sliwka, 2007. "Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes," American Economic Review, American Economic Association, vol. 97(3), pages 999-1012, June.
    2. Rankin, Frederick W., 2006. "Requests and social distance in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 60(1), pages 27-36, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gross, Till & Guo, Christopher & Charness, Gary, 2015. "Merit pay and wage compression with productivity differences and uncertainty," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 233-247.

    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. Gary Bolton & Peter Werner, 2016. "The influence of potential on wages and effort," Experimental Economics, Springer;Economic Science Association, vol. 19(3), pages 535-561, September.
    2. Anja Schöttner & Veikko Thiele, 2010. "Promotion Tournaments and Individual Performance Pay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 699-731, September.
    3. Emin Karagözoğlu & Elif Tosun, 2022. "Endogenous Game Choice and Giving Behavior in Distribution Games," Games, MDPI, vol. 13(6), pages 1-32, November.
    4. repec:hal:wpspec:info:hdl:2441/6unm655ita9ojbuuc83c9h0is8 is not listed on IDEAS
    5. Robert Dur & Jan Tichem, 2015. "Altruism and Relational Incentives in the Workplace," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 485-500, September.
    6. Grund, Christian, 2011. "Job Preferences as Revealed by Employee Initiated Job Changes," IZA Discussion Papers 6127, Institute of Labor Economics (IZA).
    7. Andrei Bremzen & Elena Khokhlova & Anton Suvorov & Jeroen van de Ven, 2015. "Bad News: An Experimental Study on the Informational Effects Of Rewards," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 55-70, March.
    8. von Siemens, Ferdinand A., 2013. "Intention-based reciprocity and the hidden costs of control," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 55-65.
    9. 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).
    10. Simon Gächter & Daniele Nosenzo & Martin Sefton, 2013. "Peer Effects In Pro-Social Behavior: Social Norms Or Social Preferences?," Journal of the European Economic Association, European Economic Association, vol. 11(3), pages 548-573, June.
    11. Emeric Henry & Nicolas Jacquemet & Roberto Galbiati, 2017. "Spillovers, Persistence and Learning: Institutions and the Dynamics of Cooperation," SciencePo Working papers Main halshs-01613850, HAL.
    12. Goeschl, Timo & Jarke, Johannes, 2014. "Trust, but verify? When trustworthiness is observable only through (costly) monitoring," WiSo-HH Working Paper Series 20, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    13. Craig Landry & Andreas Lange & John List & Michael Price & Nicholas Rupp, 2011. "Is There a 'Hidden Cost of Control' in Naturally-Occurring Markets? Evidence from a Natural Field Experiment," Natural Field Experiments 00593, The Field Experiments Website.
    14. Brice Corgnet & Roberto Hernán-González, 2011. "Don't Ask Me If You Will Not Listen: The Dilemma of Participative Decision Making," Working Papers 11-04, Chapman University, Economic Science Institute.
    15. Krysiak, Frank C. & Oberauner, Iris Maria, 2010. "Environmental policy à la carte: Letting firms choose their regulation," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 221-232, November.
    16. Michèle Belot & Marina Schröder, 2016. "The Spillover Effects of Monitoring: A Field Experiment," Management Science, INFORMS, vol. 62(1), pages 37-45, January.
    17. Khalmetski, Kiryl & Ockenfels, Axel & Werner, Peter, 2015. "Surprising gifts: Theory and laboratory evidence," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 163-208.
    18. Mazyaki, Ali & van der Weele, Joël, 2019. "On esteem-based incentives," International Review of Law and Economics, Elsevier, vol. 60(C).
    19. Maria Cotofan, 2019. "Learning from Praise: Evidence from a Field Experiment with Teachers," Tinbergen Institute Discussion Papers 19-082/V, Tinbergen Institute.
    20. Woźny, Łukasz, 2015. "On incentives, temptation and self-control," Mathematical Social Sciences, Elsevier, vol. 74(C), pages 60-67.
    21. Masella, Paolo & Meier, Stephan & Zahn, Philipp, 2014. "Incentives and group identity," Games and Economic Behavior, Elsevier, vol. 86(C), pages 12-25.

    More about this item

    Keywords

    Communication; entitlements; fairness norms; gift exchange; relative wages;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

    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:kls:series:0056. 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: Kiryl Khalmetski The email address of this maintainer does not seem to be valid anymore. Please ask Kiryl Khalmetski to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/swkoede.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.