We study worker behavior in an efficiency-wage environment in which coworkers’ wages can influence a worker’s effort. Theoretically, we show that an increase in workers’ responsiveness to coworkers’ wages should lead profit-maximizing firms to compress wages. Our laboratory experiments,...

The gift-exchange game has established that, in the laboratory, higher wages offered by an employer lead to considerably more costly effort provision. However, it is unclear whether this behavior reflects reciprocity or other forms of social preferences. This article tests whether attribution of...

This paper investigates whether information about fairness types can be useful in lowering dispute costs and enhancing bargaining efficiency. An experiment was conducted in which subjects were first screened using a dictator game, with the allocations chosen used to separate participants into...

Self-control problems have recently received considerable attention from economic theorists. We conducted two studies involving behavioral interventions expected to affect performance, providing some of the first experimental data in this area. In the first we investigate whether evenly spaced...

A self‐serving bias occurs when people subconsciously alter their perceptions about what is fair or right in a manner that serves their own interests. Perceptions of what constitutes “fair performance” may well vary according to one’s role in the employment relationship. While it is...