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CeDEx Discussion Paper Series, The University of Nottingham >
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http://hdl.handle.net/10419/49657
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| Title: | | The impact of pay comparisons on effort behavior  |
| Authors: | | Nosenzo, Daniele |
| Issue Date: | | 2010 |
| Series/Report no.: | | CeDEx discussion paper series 2010-03 |
| Abstract: | | This study uses a three-person gift-exchange game experiment to examine the impact of pay comparisons on effort behavior. We compare effort choices made in a treatment where workers' wages are secret with effort choices made in two 'public wages' treatments. The two 'public wages' treatments differ in whether co-workers' wages are chosen by an employer, or are fixed exogenously by the experimenter. We find that pay comparison information has an overall detrimental impact on effort choices: employees respond less favorably to the wage offers made by the employer when they receive information about the wage paid to the co-worker as compared to the case where co-workers' wages are secret. These effects are particularly pronounced in the treatment where the level of the co-worker's wage is fixed exogenously. |
| Subjects: | | social comparisons wage comparisons gift exchange experiments |
| JEL: | | C91 C92 J31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CeDEx Discussion Paper Series, The University of Nottingham
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