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How worker participation affects reciprocity under minimum remuneration policies: Experimental evidence

Author

Listed:
  • Köhler, Katrin
  • Pagel, Beatrice
  • Rau, Holger A.
Abstract
We analyze the role of worker participation for the success of minimum remuneration policies. In our experiments employers remunerate workers doing a real-effort task. We vary the way how a minimum remuneration policy is introduced. In the worker-participation treatment, workers bargain with the employer on the enforcement of the policy. In the control treatment the policy is exogenously introduced. We find a pronounced effort increase after the policy was enforced. An exogenous introduction has detrimental effects, i.e., employers frequently pay a premium to maintain performance. Thus, worker participation may be an effective means for maintaining reciprocity under minimum remuneration policies.

Suggested Citation

  • Köhler, Katrin & Pagel, Beatrice & Rau, Holger A., 2015. "How worker participation affects reciprocity under minimum remuneration policies: Experimental evidence," University of Göttingen Working Papers in Economics 267, University of Goettingen, Department of Economics.
    • Handle: RePEc:zbw:cegedp:267
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    References listed on IDEAS

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    2. Kleine, Marco & Langenbach, Pascal & Zhurakhovska, Lilia, 2017. "How voice shapes reactions to impartial decision-makers: An experiment on participation procedures," Journal of Economic Behavior & Organization, Elsevier, vol. 143(C), pages 241-253.
    3. Benndorf, Volker & Rau, Holger A. & Sölch, Christian, 2018. "Minimizing learning behavior in repeated real-effort tasks," University of Göttingen Working Papers in Economics 343, University of Goettingen, Department of Economics.

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    More about this item

    Keywords

    bargaining; experiment; real effort; worker participation;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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