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Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence

Jordi Brandts
Instituto de Analisis Economico (CSIC) Barcelona

Gary Charness
University of California, Santa Barbara - Department of Economics

July 8, 2003

Universitat Pompeu Fabra Working Paper No. 491

Abstract:
We study how two dimensions of market conditions affect behavior in experimental gift-exchange markets with repeated interaction. First, we consider the impact of competitive imbalance, by varying whether there is an excess supply of firms or an excess supply of workers in the market. Second, we impose a minimum wage in the market with an excess supply of workers, and study the overall effect on wages and productivity. Perhaps surprisingly, the state of competition does not appear to have strong effects in our data; however, there is some evidence of lower productivity when a minimum wage is imposed.

Keywords: Experiment, Unbalanced Markets, Cooperation, Gift-Exchange

JEL Classifications: A13, C91,C92, D43, J41

Working Paper Series

Date posted: November 04, 2000 ; Last revised: August 22, 2003

Suggested Citation

Brandts, Jordi and Charness, Gary, Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence (July 8, 2003). Universitat Pompeu Fabra Working Paper No. 491. Available at SSRN: http://ssrn.com/abstract=245348 or doi:10.2139/ssrn.245348

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Contact Information

Gary Charness (Contact Author) University of California, Santa Barbara - Department of Economics ( email ) 2127 North Hall Santa Barbara, CA 93106 United States 805-893-2412 (Phone) 805-893-8830 (Fax)
Jordi Brandts Instituto de Analisis Economico (CSIC) Barcelona ( email ) UAB Campus E-08193 Bellaterra Spain