Workers’ participation in wage setting: A gift-exchange experiment

Jörg Franke, Ruslan Gurtoviy and Vanessa Mertins

Journal of Economic Psychology, 2016, vol. 56, issue C, 151-162

Abstract: This study analyzes the consequences of workers’ participation in the wage setting process on effort exertion. The experimental design is based on a modified gift-exchange game with firms specifying contract alternatives and workers deciding about the finally implemented alternative. The experimental data reveals that workers with participation rights are more sensitive to differences in wage offers: Low wage offers trigger negative reciprocity which dominates the positive incentive effects from high wage offers. On average, participation in the wage setting process leads to a decline in effort exertion.

Keywords: Participation; Labor market; Gift-exchange game; Personnel economics; Reciprocity (search for similar items in EconPapers)
JEL-codes: C72 C91 J33 L23 M52 M55 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:56:y:2016:i:c:p:151-162

DOI: 10.1016/j.joep.2016.07.002

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