Resource title

Incomplete and Asymmetric Surplus Information in Labor Relations

Resource image

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Resource description

Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower – or absent – when the information is incomplete. We report a laboratory experiment with symmetric and asymmetric incomplete surplus information in a ?bilateral gift exchange? setting. We find that trust and reciprocity have a significant positive effect on wages, effort and efficiency. But, all three are substantially lower under incomplete than under complete information. The negative impact on wages and efficiency is even greater with information asymmetry.

Resource author

Heike Hennig-Schmidt, Bettina Rockenbach, Abdolkarim Sadrieh

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22872

Resource license

Adapt according to the presented license agreement and reference the original author.