The Emergence of Social Structure: Employer Information Networks in an Experimental Labor Market

Tinbergen Institute Discussion Paper 11-032/1

55 Pages Posted: 15 Feb 2011

See all articles by Klarita Gërxhani

Klarita Gërxhani

University of Amsterdam - Faculty of Economics and Business (FEB); University of Amsterdam - Amsterdam Institute for Social Science Research (AISSR); University of Amsterdam - Amsterdam Institute for Advanced Labour Studies (AIAS)

Jordi Brandts

Instituto de Analisis Economico (CSIC) Barcelona

Arthur J. H. C. Schram

University of Amsterdam - Faculty of Economics and Business (FEB); Tinbergen Institute

Date Written: January 4, 2011

Abstract

We use laboratory experiments to investigate how employers develop social structures for sharing information about the trustworthiness of job candidates, when worker opportunism is possible. The experimental data show that substantial information sharing emerges. Two types of information networks are observed. One consists of 'anonymity networks' where information is anonymously and voluntarily provided as a collective good for all employers to use. The other type is a 'reciprocity network' where information sharing is driven by the rewarding of previously given information by the requestor. In both types, the extent of information sharing depends on the costs of providing it. Moreover, information sharing enables employers to recruit trustworthy workers which creates a high quality of trading, benefiting both employer and worker.

Keywords: Social structure, Information networks, Recruitment, Experiments

JEL Classification: Z13, J23

Suggested Citation

Gërxhani, Klarita and Brandts, Jordi and Schram, Arthur J. H. C., The Emergence of Social Structure: Employer Information Networks in an Experimental Labor Market (January 4, 2011). Tinbergen Institute Discussion Paper 11-032/1. Available at SSRN: https://ssrn.com/abstract=1761347 or http://dx.doi.org/10.2139/ssrn.1761347

Klarita Gërxhani (Contact Author)

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Oudezijds Achterburgwal 185
Amsterdam, 1012 DK
Netherlands

HOME PAGE: http://home.medewerker.uva.nl/k.gerxhani/

University of Amsterdam - Amsterdam Institute for Social Science Research (AISSR) ( email )

Oudezijds Achterburgwal 185
Amsterdam, 1012 DK
Netherlands

HOME PAGE: http://home.medewerker.uva.nl/k.gerxhani/

University of Amsterdam - Amsterdam Institute for Advanced Labour Studies (AIAS)

Amsterdam
Netherlands

Jordi Brandts

Instituto de Analisis Economico (CSIC) Barcelona ( email )

UAB Campus
E-08193 Bellaterra
Spain

Arthur J. H. C. Schram

University of Amsterdam - Faculty of Economics and Business (FEB) ( email )

Roetersstraat 18
CREED
Amsterdam 1018 WB
Netherlands
+31 (0)20 525 4293 (Phone)

HOME PAGE: http://www.fee.uva.nl/creed/PEOPLE/Arthurs.htm

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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