Deferred compensation and gift exchange
Subtitle: an experimental investigation into multi-period labor markets
By: by Steffen Huck, Andrew Seltzer, Brian Wallace.
Contributors: Seltzer, Andrew.; Wallace, Brian.
Series: Discussion paper ;; no. 1193; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1193
Publisher: IZA
Published: 2004
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Description: "This paper examines the relationship between firms' wage offers and workers' supply of effort using a three-period experiment. In equilibrium, firms will offer deferred compensation: first period productivity is positive and wages are zero, while third period productivity is zero and wages are positive. The experiment produces strong evidence that deferred compensation increases worker effort; in about 70 percent of cases subjects supplied the optimal effort given the wage offer, and there was a strong effort response to future-period wages. We also find some evidence of gift exchange; worker players increased the effort levels in response to above equilibrium wage offers by a human, but not in response to similar offers by a computer. Finally, we find that firm players who are initially hesitant to defer compensation learn over time that it is beneficial to do so"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 5/10/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.