When Social Forces Remove the Impact of Competition. Social Exchange in Experimental Labor Markets

Ernst Fehr, Erich Kirchler and Andreas Weichbold
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Erich Kirchler: Institute of Psychology, Department of Applied Psychology, University of Vienna
Andreas Weichbold: Department of Economics, Institute for Advanced Studies, Vienna

No 8, Economics Series from Institute for Advanced Studies

Abstract: Do competitive markets remove the impact of social norms and customs on market out-comes? Or are these social forces capable of exerting a persistent influence? Many economists seem to believe that social norms and customs have, if at all, only temporary effects in competitive markets. So far this belief has been confirmed by the evidence of many competitive market experiments. In this paper we report the results of a series of competitive market and bilateral bargaining experiments. They indicate that social norms may not only persist in a competitive environment but that they may completely remove the impact of competition on the market outcome.

Keywords: Competition; Social Exchange; Trust; Reciprocity; Social Norms (search for similar items in EconPapers)
JEL-codes: C91 C92 J30 J31 J41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1995-05
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https://irihs.ihs.ac.at/id/eprint/838 First version, 1995 (application/pdf)

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