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

One of the outstanding results of three decades of laboratory market research is that under rather weak conditions prices and quantities in competitive experimental markets converge to the competitive equilibrium. Yet, the design of these experiments ruled out gift exchange or reciprocity...

This note offers two comments on the article "Social Influences towards Conformism in Economic Experiments" by Hargreaves Heap that is to appear in the Economics e-Journal. One relates to the concept of conformism, the other lines out some phenomena where an explicit recognition of group...

We study the role of norm violations and learning behavior in multi- and single-worker gift-exchange games and find that working with co-workers leads to a twofold effect. First, flexible wages yield moderately higher efforts than in the single-employee treatment. The data suggests that this is...