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Social comparisons in wage delegation: experimental evidence

Published online by Cambridge University Press:  14 March 2025

Gary Charness,
Ramón Cobo-Reyes,
Juan A. Lacomba,
Francisco Lagos and
Jose Maria Perez
Gary Charness*
Affiliation:
Department of Economics, University of California, 2127 North Hall, Santa Barbara, CA 93106-9210, USA
Ramón Cobo-Reyes*
Affiliation:
University of Exeter Business School, Exeter, UK
Juan A. Lacomba*
Affiliation:
Departamento de Teoria e Historia Economica, University of Granada & Globe, Campus Cartuja, s/n, Granada 18071, Spain
Francisco Lagos*
Affiliation:
Departamento de Teoria e Historia Economica, University of Granada & Globe, Campus Cartuja, s/n, Granada 18071, Spain
Jose Maria Perez
Affiliation:
University of Granada, Granada, Spain
*
charness@econ.ucsb.edu
ramonc@ugr.es
jlacomba@ugr.es
fmlagos@ugr.es
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Abstract

We make two main contributions in this article. We examine whether social comparisons affects workers’ performance when a firm can choose workers’ wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning both wages and decision rights affect workers’ performance. Our second contribution is methodological. We find that our treatment effects are present with both stated effort and a real-effort task, which suggests that both approaches may yield similar results in labor experiments.

Keywords

DelegationDiscriminationExperimentReal effortSocial comparisonsStated effort

JEL classification

D01: Microeconomic Behavior: Underlying PrinciplesJ41: Labor ContractsJ3: Wages, Compensation, and Labor CostsC91: Laboratory, Individual Behavior

Information

Type
Original Paper
Information
Experimental Economics , Volume 19 , Issue 2 , June 2016, pp. 433 - 459
Copyright
Copyright © 2015 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-015-9448-x) contains supplementary material, which is available to authorized users.

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Instructions for the Delegation and Wage information Treatment
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