Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141614
Authors: 
Sliwka, Dirk
Werner, Peter
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9855
Abstract: 
We investigate how workers' performance is affected by the timing of wages in a real-effort experiment. In all treatments agents earn the same wage sum but wage increases are distributed differently over time. We find that agents work harder under increasing wage profiles if they do not know these profiles in advance. A profile that continuously increases wages by small amounts raises performance by about 15% relative to a constant wage. The effort reactions can be organized by a model in which agents reciprocally respond to wage impulses, comparing wages to an adaptive reference standard determined by the previous wage.
Subjects: 
wage
reciprocity
reference point
JEL: 
M12
C91
Document Type: 
Working Paper

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