Wages, Length of Relationship and Bargaining Power:An experimental study in a world of complete contracts

To explain potential sources of wage rigidity this article analyzes a model of reciprocalkindness applied to a repeated ultimatum game with changing and nonzeroconflict payoffs. The model is also tested in a laboratory experiment. The resultsare compatible with the rentsharingapproach to wage rigidity. Wages adjust to‘market pressure’ but are less flexible when employees demand their wages, i. e.when they are in a relatively strong bargaining position.

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Year of publication:	2004-03-01
Authors:	Dittrich, Dennis A. V.
Institutions:	Max-Planck-Institut für Ökonomik <Jena> / Abteilung Strategische Interaktion
Subject:	Effizienzlohn \| efficiency wage \| Arbeitsmarkt \| Labour Market \| Reziprozität \| Kontrakttheorie \| Experimentelle Spieltheorie \| Experimental Economics \| Lohnstarrheit \| wage rigidity

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Extent:	24 p. 1545,84 p. application/pdf
Series:	Max-Planck-Institut für Ökonomik - Papers on Strategic Interaction Discussion Paper ; 0418 (2004)
Type of publication:	Book / Working Paper
Language:	English
Classification:	C72 - Noncooperative Games ; C78 - Bargaining Theory; Matching Theory ; C91 - Laboratory, Individual Behavior ; E24 - Employment; Unemployment; Wages ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; Personnel psychology ; Pay salaries and social benefits ; Labour law and industrial relations ; Simulation methods ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10005866814