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The power of delegation: Allowing workers to choose their wage

Gary Charness (), Ramon Cobo-Reyes, Natalia Jiménez (), Juan Antonio Lacomba () and Francisco Lagos ()
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Juan Antonio Lacomba: Department of Economic Theory and Economic History, University of Granada.

No 09/07, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: This paper analyzes the effect of delegation on the employees’ performance in an experimental gift exchange game where employers may allow workers to choose their own wage. Our results show that workers reciprocate positively towards companies that delegate the decision of the wage, obtaining that higher effort levels are displayed when workers are free to choose their wage, even when wages chosen by employees are similar to those assigned by employers. In addition, we find that this enhancement in workers’ behavior is mainly due to the positive effect of delegation per se rather than to the “responsibility-alleviation”.

Keywords: labor market; gift exchange-game; delegation; responsibility-allevietion; experiments. (search for similar items in EconPapers)
Pages: 24 pages
Date: 2010
New Economics Papers: this item is included in nep-bec, nep-exp and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:gra:wpaper:09/07

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