Workers’ participation in wage setting: A gift-exchange experiment

Jorg Franke, Ruslan Gurtoviy, Vanessa Mertins

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

This study analyzes the consequences of workers’ participation in the wage setting process on effort exertion. The experimental design is based on a modified gift-exchange game with firms specifying contract alternatives and workers deciding about the finally implemented alternative. The experimental data reveals that workers with participation rights are more sensitive to differences in wage offers: Low wage offers trigger negative reciprocity which dominates the positive incentive effects from high wage offers. On average, participation in the wage setting process leads to a decline in effort exertion.

Original languageEnglish
Pages (from-to)151-162
Number of pages12
JournalJournal of Economic Psychology
Volume56
Early online date25 Jul 2016
DOIs
Publication statusPublished - 1 Oct 2016

Keywords

  • Gift-exchange game
  • Labor market
  • Participation
  • Personnel economics
  • Reciprocity

ASJC Scopus subject areas

  • Applied Psychology
  • Sociology and Political Science
  • Economics and Econometrics

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