Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine!

Hernan Bejarano, Brice Corgnet and Joaquín Gómez-Miñambres ()
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Joaquín Gómez-Miñambres: Lafayette College, Department of Economics and Economic Science Institute, Chapman University

Working Papers from Chapman University, Economic Science Institute

Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the giftexchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.

Keywords: Gift-exchange; Incentives; Self-serving Biases; Reference-dependent Utility; Laboratory Experiments; Labor Conflicts (search for similar items in EconPapers)
JEL-codes: C92 D23 M54 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-exp, nep-hrm, nep-ltv and nep-upt
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Citations: View citations in EconPapers (1)

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https://digitalcommons.chapman.edu/esi_working_papers/286/

Related works:
Working Paper: Labor contracts, gift-exchange and reference wages: Your gift need not be mine (2021)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:19-26

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