Fair wages when employers face the risk of losing money

Karina Gose and Abdolkarim Sadrieh

Economics Letters, 2012, vol. 117, issue 3, 687-690

Abstract: When employers can incur losses from the labor relationship in a gift exchange game, they offer lower wages on average than in a no-loss relationship. Taking employers’ risk of losing money into account, employees exert more effort per wage unit.

Keywords: Efficiency wage; Social comparison; Inequity aversion; Loss aversion; Strategic risk (search for similar items in EconPapers)
JEL-codes: C92 D23 J41 M52 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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Working Paper: Fair Wages When Employers Face the Risk of Losing Money (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:3:p:687-690

DOI: 10.1016/j.econlet.2011.12.073

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