Workers’ participation in wage setting and opportunistic behavior
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Date
2014-03-26
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Abstract
Our 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 where the degree of workers’ involvement in the wage setting process is
systematically varied among the workers. The experimental data reveals that workers’
participation leads actually to a decline in effort exertion which can be explained by
negative reciprocity of the respective worker. These results put some recently observed
positive effects from workers’ participation in experimental labor markets into
perspective and are more in line with the ambiguous results from empirical studies.
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Keywords
participation, reciprocity, personnel economics, gift-exchange game, labor market