Communication versus Information Transparency in One‐Shot Interactions: A Labor Market Experiment

Ebru Işgın

Managerial and Decision Economics, 2017, vol. 38, issue 7, 955-963

Abstract: This is an experimental study of communication and information transparency in one‐shot labor market relations with incomplete contracts. We find that communication in the form of non‐binding broadcast chat messages increases wages, effort levels, and overall efficiency regardless of the information regime. It serves as a negotiation platform and helps workers and firms learn how to cooperate. Communication outperforms information transparency in motivating trust and cooperative behavior in one‐shot interactions. Although transparency might be important in the long term, it does not improve any of the market outcomes in short‐term relations unless it is combined with communication. Copyright © 2017 John Wiley & Sons, Ltd.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:38:y:2017:i:7:p:955-963

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