Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis

No 4687, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate the impact of wage comparisons for worker productivity. We present three studies which all use three-person gift-exchange experiments. Consistent with Akerlof and Yellen's (1990) fair wage-effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advantageous wage discrimination does not increase efforts on average. Two studies allow us to measure wage comparison effects at the individual level. We observe strongly heterogeneous wage comparison effects. We also find that reactions to wage discrimination can be attributed to the underlying intentions of discrimination rather than to payoff consequences.

Keywords: horizontal fairness; fair wage-effort hypothesis; wage comparison; gift exchange; discrimination (search for similar items in EconPapers)
JEL-codes: C91 C92 J31 J71 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (113)

Published - revised version published in: Journal of Economic Behavior and Organization, 2010, 76 (3), 531-543

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Related works:
Journal Article: Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis (2010)
Working Paper: Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis (2010)
Working Paper: Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis (2009)
Working Paper: Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis (2009)
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