Incomplete and Asymmetric Surplus Information in Labor Relations

Heike Hennig-Schmidt, Bettina Rockenbach and Abdolkarim Sadrieh

No 24/2003, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower or absent when the information is incomplete. We report a laboratory experiment with symmetric and asymmetric incomplete surplus information in a “bilateral gift exchange” setting. We find that trust and reciprocity have a significant positive effect on wages, effort and efficiency. But, all three are substantially lower under incomplete than under complete information. The negative impact on wages and efficiency is even greater with information asymmetry.

Keywords: trust; reciprocity; efficiency; incomplete information; asymmetric information (search for similar items in EconPapers)
JEL-codes: C92 D82 J41 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Incomplete and Asymmetric Surplus Information in Labor Relations (2003)
Working Paper: Incomplete and Asymmetric Surplus Information in Labor Relations (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:242003

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