Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis

Simon Gächter and Christian Thöni

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Abstract: We investigate the impact of wage comparisons for worker productivity. We present three studies which all use three-person gift-exchange experiments. Consistent with Akerlof and Yellen's (1990) fair wage-effort hypothesis we find that disadvantageous wage discrimination leads to lower efforts while advantageous wage discrimination does not increase efforts . Two studies allow us to measure wage comparison effects at the individual level. We observe strongly heterogeneous wage comparison effects. We also find that reactions to wage discrimination can be attributed to the underlying intentions of discrimination rather than to payoff consequences.

Keywords: individual heterogeneity; fair wage-effort hypothesis; wage comparison; gift exchange; horizontal fairness; wage discrimination; labor market experiments; strategy method; individual heterogeneity. (search for similar items in EconPapers)
Date: 2010-11-30
Note: View the original document on HAL open archive server: https://hal.science/hal-00911823
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Citations: View citations in EconPapers (72)

Published in Journal of Economic Behavior and Organization, 2010, 76 (3), pp.531. ⟨10.1016/j.jebo.2010.08.008⟩

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Journal Article: Social comparison and performance: Experimental evidence on the fair wage-effort hypothesis (2010)
Working Paper: Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis (2010)
Working Paper: Social Comparison and Performance: Experimental Evidence on the Fair Wage-Effort Hypothesis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00911823

DOI: 10.1016/j.jebo.2010.08.008

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