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Co-employment of permanently and temporarily employed agents

Vera Angelova (), Werner Güth () and Martin Kocher ()

Labour Economics, 2012, vol. 19, issue 1, 48-58

Abstract: One-shot interaction and repeated interaction often co-exist in the real world. We study possible behavioral effects of this co-existence in a principal–agent setting, in which a principal simultaneously employs a permanent and a temporary agent. Our experimental results indicate that there is “discrimination” between the two agents and that the available information for agents determines the extent of this discrimination, even though the theoretical solution of the game implies equal treatment of agents. Discrimination is, thus, a consequence of reciprocity. Agents that are discriminated against react negatively by withholding effort.

Keywords: Principal–agent problem; Permanent and temporary employment; Fairness; Wage discrimination (search for similar items in EconPapers)
JEL-codes: C72 C91 D21 J31 (search for similar items in EconPapers)
Date: 2012
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Related works:
Working Paper: Co-employment of permanently and temporarily employed agents (2012)
Working Paper: Co-employment of permanently and temporarily employed agents (2010) Downloads
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