Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200238
Authors: 
Fochmann, Martin
Sachs, Florian
Weimann, Joachim
Year of Publication: 
2019
Series/Report no.: 
arqus Discussion Paper 238
Abstract: 
Services are often provided by groups. The question of remuneration arises both at the group level and for each individual group member. We examine the question of how relative pay should be designed within the group if all group members are to regard the payment scheme as fair. We use a three-step laboratory experiment to compare which fairness norms are chosen by high-performing and low-performing group members. It turns out that both types of group members prefer the performance pay principle. Support for equal pay is negligible. However, the low performers use their bargaining power to improve their position, but without deviating from the performance principle substantially. A random influence on the performance of the players does not change the results.
Subjects: 
performance principle
fairness norms
relative remuneration
JEL: 
C91
C92
D31
D90
J31
M52
Document Type: 
Working Paper
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