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Fairness in the Labour Market

A Survey of Experimental Results

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Book cover Surveys in Experimental Economics

Part of the book series: Contributions to Economics ((CE))

Abstract

In this chapter we provide a selective survey of experiments to investigate the potential of social motivations in explaining labour market phenomena. We argue that laboratory experiments are a useful instrument to explore issues in labour market theory and personnel economics. Our starting point is the observation that employment relations are frequently governed by incomplete contracts. We show that the norm of reciprocity that leads to gift exchanges is an effective contract enforcement device under conditions of contractual incompleteness. We then present evidence that gift exchange can explain various labour market phenomena that are puzzles from the viewpoint of standard economic theory. Further issues in the related field of personnel economics that have by now been subjected to an experimental scrutiny concern characteristics of the employment relation and the issues of motivation and incentives systems. We conclude by pointing out the complementary nature of experiments to more conventional methods of data gathering.

Support by the Swiss National Science Foundation under the project no. 1214-05100.97 and the EU-TMR project ENDEAR (FMRX CT98-0238) is gratefully acknowledged. Armin Falk, Manfred Königstein, Dorothea Kübler, Christian Thöni and the participants of the GEW Meeting in Meissen in October 1998 provided very helpful comments.

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Authors
  1. Simon Gächter
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  2. Ernst Fehr
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Editors and Affiliations

  1. Wirtschaftswissenschaftliche Fakultät Lehrstuhl VWL, insbesondere Wirtschaftstheorie, Europa-Universität Viadrina, Große Scharrnstraße 59, Frankfurt/Oder, D-15230, Germany

    Friedel Bolle

  2. Fakultät für Wirtschaftswissenschaften Managerial Economics, Technische Universität Dresden, Mommsenstraße 13, Dresden, D-01062

    Marco Lehmann-Waffenschmidt

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© 2002 Springer-Verlag Berlin Heidelberg

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Gächter, S., Fehr, E. (2002). Fairness in the Labour Market. In: Bolle, F., Lehmann-Waffenschmidt, M. (eds) Surveys in Experimental Economics. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-57458-0_7

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  • DOI: https://doi.org/10.1007/978-3-642-57458-0_7

  • Publisher Name: Physica, Heidelberg

  • Print ISBN: 978-3-7908-1472-9

  • Online ISBN: 978-3-642-57458-0

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