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Other-Regarding Preferences with Peer Workers in Labor Markets: An Experimental Investigation

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  • Mark F. Owens

Abstract

A peer worker is introduced in a controlled labor market experiment characterized by unobservable effort and incomplete contracts. Workers make decisions independently and without knowledge of each others’ actions in a modified gift exchange experiment. Introducing a peer worker into an ongoing market has a negative and significant effect on effort provided in contrast to prior experimental studies of peer effects which find positive effects with observable effort. This decrease in effort is not driven by other-regarding equity concerns for the manager’s payoffs.

Suggested Citation

  • Mark F. Owens, 2010. "Other-Regarding Preferences with Peer Workers in Labor Markets: An Experimental Investigation," Working Papers 201008, Middle Tennessee State University, Department of Economics and Finance.
    • Handle: RePEc:mts:wpaper:201008
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    File URL: http://capone.mtsu.edu/berc/working/ORPwP.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Peer Effects; Incomplete Contracts; Other-Regarding Behavior; Gift Exchange; Experiment;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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