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Salary History Bans and Wage Bargaining: Experimental Evidence

Shantanu Khanna ()

Labour Economics, 2020, vol. 65, issue C

Abstract: Motivated by recently passed laws in the United States banning inquiries about salary history, this experiment examines the impact of information about a player’s outside option in bargaining. The policy intention is studied by comparing private information to perfect information. Since the laws do not prevent voluntary revelation of salaries, a third treatment examines the impact of adding a truthful revelation choice by the informed party. I find that the signaling value of revelation decisions undermines the benefits of private information. A fourth treatment allows for outside options to be misrepresented. Overall, results suggest that these laws may not work as well as intended.

Keywords: Labor Discrimination; Public Policy; Experimental Bargaining; Ultimatum Game; Cheap Talk; Signaling (search for similar items in EconPapers)
JEL-codes: C78 C91 J38 J78 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.labeco.2020.101853

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