Testing a forgotten aspect of Akerlof's gift exchange hypothesis: Relational contracts with individual and uniform wages

Arbeitspapier

Empirical work on Akerlof's theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort, resulting in higher rents and higher market efficiency, than agents that receive different wages. We present the first test of this component, which we call the fair uniform-wage hypothesis. In our laboratory experiment, we establish the existence of a significant efficiency premium of uniform wages. However, it is not the consequence of a stronger level of reciprocity by agents, but of the retrenchment of sanctioning options on the side of principals with uniform wages. Hence, implementing limitations to contractual freedom can have efficiency-enhancing effects.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2012-02

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Design of Experiments: Laboratory, Individual ; Design of Experiments: Laboratory, Group Behavior ; Firm Behavior: Theory ; Wage Level and Structure; Wage Differentials ; Labor-Management Relations, Trade Unions, and Collective Bargaining: General
• Subject: gift exchange ; multiple agents ; uniform contracts ; collective wage ; experiment ; Lohnbildung ; Austauschtheorie (Soziologie) ; Unvollständiger Vertrag ; Effizienzlohn ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kocher, Martin G. ; Luhan, Wolfgang J. ; Sutter, Matthias
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/73549
• Last update: 10.03.2025, 11:43 AM CET