Are efficiency wages equality wages? Exogenously induced fairness norms in working environments

Gary Bolton () and Peter Werner

No 56, Working Paper Series in Economics from University of Cologne, Department of Economics

Abstract: We investigate how the introduction of a salient norm for pay differentiation influences wage offers and effort exertion in a gift exchange experiment. Exogenously induced claims indeed lead to substantial differentiation in wages. At the same time, unequal wage schemes do not crowd out effort exertion. In particular, we do not observe strong detrimental effects resulting from disadvantageous relative wage positions. Finally, we find that specific communication patterns have a significant impact on effort exertion.

Keywords: Communication; entitlements; fairness norms; gift exchange; relative wages (search for similar items in EconPapers)
JEL-codes: C92 D63 J31 M52 (search for similar items in EconPapers)
Date: 2012-08-03
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm, nep-lab and nep-lma
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Citations: View citations in EconPapers (1)

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