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dc.contributor.authorBrown, Martinen_US
dc.contributor.authorFalk, Arminen_US
dc.contributor.authorFehr, Ernsten_US
dc.date.accessioned2008-08-26en_US
dc.date.accessioned2010-07-07T11:34:03Z-
dc.date.available2010-07-07T11:34:03Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/35139-
dc.description.abstractWhen unemployment prevails, relations with a particular firm are valuable for workers. As a consequence, a worker may adhere to an implicit agreement to provide high effort, even when performance is not third-party enforceable. But can implicit agreements - or relational contracts - also motivate high worker performance when the labor market is tight? We examine this question by implementing an experimental market in which there is an excess demand for labor and the performance of workers is not third-party enforceable. We show that relational contracts emerge in which firms reward performing workers with wages that exceed the going market rate. This motivates workers to provide high effort, even though they could shirk and switch firms. Our results thus suggest that unemployment is not a necessary device to motivate workers. We also discuss how market conditions affect relational contracting by comparing identical labor markets with excess supply and excess demand for labor. Long-term relationships turn out to be less frequent when there is excess demand for labor compared to a market characterized by unemployment. Surprisingly though, this does not compromise market performance.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 3345en_US
dc.subject.jelD82en_US
dc.subject.ddc330en_US
dc.subject.keywordRelational contractsen_US
dc.subject.keywordinvoluntary unemploymenten_US
dc.subject.stwArbeitsvertragen_US
dc.subject.stwImplizite Kontrakteen_US
dc.subject.stwUnfreiwillige Arbeitslosigkeiten_US
dc.subject.stwArbeitslosigkeiten_US
dc.subject.stwLeistungsmotivationen_US
dc.subject.stwLeistungskontrolleen_US
dc.subject.stwArbeitsnachfrageen_US
dc.subject.stwWettbewerben_US
dc.subject.stwTheorieen_US
dc.titleCompetition and relational contracts: the role of unemployment as a disciplinary deviceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn560201354en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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