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Social comparison and performance : Experimental evidence on the fair wage–effort hypothesis

Simon Gächter & Christian Thoeni

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
   
type journal paper
   
keywords
   
language English
kind of paper journal article
date of appearance 1-12-2010
journal Journal of Economic Behavior & Organization
publisher Elsevier (Amsterdam)
ISSN 0167-2681
ISSN (online) 1879-1751
DOI 10.1016/j.jebo.2010.08.008
volume of journal 76
number of issue 3
page(s) 531-543
review double-blind review
   
citation Gächter, S., & Thoeni, C. (2010). Social comparison and performance: Experimental evidence on the fair wage–effort hypothesis. Journal of Economic Behavior & Organization, 76(3), 531-543, DOI:10.1016/j.jebo.2010.08.008.