Labor contracts, gift-exchange and reference wages: Your gift need not be mine

Hernan Bejarano, Brice Corgnet and Joaquín Gómez-Miñambres
Additional contact information
Joaquín Gómez-Miñambres: Lafayette College

No 56, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift- exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.

Keywords: Gift-exchange; incentives; self-serving; biases; reference-dependent; utility; laboratory; experiments; labor; conflicts (search for similar items in EconPapers)
JEL-codes: C92 D23 M54 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2021-04
New Economics Papers: this item is included in nep-hrm, nep-ltv and nep-upt
References: Add references at CitEc
Citations:

Downloads: (external link)
https://drive.google.com/file/d/1CfeImVqYdSorMSd9fH9xegXE-Xy_9NXZ/view (application/pdf)

Related works:
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
Working Paper: Labor Contracts, Gift-Exchange and Reference Wages: Your Gift Need Not Be Mine! (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:56

Access Statistics for this paper

More papers in Working Papers from Red Nacional de Investigadores en Economía (RedNIE) Contact information at EDIRC.
Bibliographic data for series maintained by Laura Inés D Amato ().