The impact of pay comparisons on effort behavior

Arbeitspapier

This study uses a three-person gift-exchange game experiment to examine the impact of pay comparisons on effort behavior. We compare effort choices made in a treatment where workers' wages are secret with effort choices made in two 'public wages' treatments. The two 'public wages' treatments differ in whether co-workers' wages are chosen by an employer, or are fixed exogenously by the experimenter. We find that pay comparison information has an overall detrimental impact on effort choices: employees respond less favorably to the wage offers made by the employer when they receive information about the wage paid to the co-worker as compared to the case where co-workers' wages are secret. These effects are particularly pronounced in the treatment where the level of the co-worker's wage is fixed exogenously.

Show object

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CeDEx Discussion Paper Series ; No. 2010-03

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Design of Experiments: Laboratory, Group Behavior ; Wage Level and Structure; Wage Differentials
• Subject: social comparisons ; wage comparisons ; gift exchange ; experiments ; Ökonomischer Anreiz ; Lohn ; Vergleich ; Verhalten ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nosenzo, Daniele
• Event: Veröffentlichung
• (who): The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx)
• (where): Nottingham
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/49657