Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73549
Authors: 
Kocher, Martin G.
Luhan, Wolfgang J.
Sutter, Matthias
Year of Publication: 
2012
Series/Report no.: 
Working Papers in Economics and Statistics 2012-02
Abstract: 
Empirical work on Akerlof's theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort, resulting in higher rents and higher market efficiency, than agents that receive different wages. We present the first test of this component, which we call the fair uniform-wage hypothesis. In our laboratory experiment, we establish the existence of a significant efficiency premium of uniform wages. However, it is not the consequence of a stronger level of reciprocity by agents, but of the retrenchment of sanctioning options on the side of principals with uniform wages. Hence, implementing limitations to contractual freedom can have efficiency-enhancing effects.
Subjects: 
gift exchange
multiple agents
uniform contracts
collective wage
experiment
JEL: 
C72
C91
C92
D21
J31
J50
Document Type: 
Working Paper

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