This paper investigates physiological responses to perceptions of unfair pay. In a simple principal agent experiment … experiment we record agents' heart rate variability. Our findings provide evidence of a link between perceived unfairness and … health, and fairness of pay …

particular, we analyze how horizontal fairness concerns affect performance and efficiency in an environment characterized by … contractual incompleteness. In our experiment, one principal is matched with two agents. The principal pays equal wages in one …

statistical tests for fairness within well-defined income distribution generating processes and a well specified notion of … fairness. We find that the likelihood ratio (LR) test for fairness versus unfairness within two such processes are proportional … their values differently – to compare them to critical values for a test of the null hypothesis of fairness, or to use them …

incompleteness and relational nature of most employment contracts and (ii) the existence of reference-dependent fairness concerns … among a substantial share of the population into account. Theory shows and experiments confirm, that even if fairness … fairness on effort, derive predictions from our approach for entry-level wages and incumbent workers' wages, confront these …

, we show that social image has little influence because guilt and envy are almost similar in anonymous and non …