In search of worker's real effort reciprocity: A field and a laboratory experiment

H. Hennig-Schmidt, B. Rockenbach, A. Sadrieh

Research output: Contribution to journalArticleScientificpeer-review

72 Citations (Scopus)

Abstract

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort. In an additional real-effort laboratory experiment we show that explicit cost and surplus information that enables an exact calculation of an employer's surplus from the work contract is a crucial prerequisite for a positive wage–effort relation. This demonstrates that an employee's reciprocity requires a clear assessment of the surplus at stake. (JEL: C91, C92, J41)
Original languageEnglish
Pages (from-to)817-837
JournalJournal of the European Economic Association
Volume8
Issue number4
Publication statusPublished - 2010

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