Social Preferences, Accountability, and Wage Bargaining

48 Pages Posted: 23 Sep 2012

See all articles by Martin G. Kocher

Martin G. Kocher

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Göteborg University - School of Business, Economics and Law; Queensland University of Technology - School of Economics and Finance

Odile M. Poulsen

University of East Anglia (UEA) - School of Economic and Social Studies

Daniel John Zizzo

University of Queensland

Date Written: September 10, 2012

Abstract

We assess the extent of preferences for employment in a collective wage bargaining situation with heterogeneous workers. We vary the size of the union and introduce a treatment mechanism transforming the voting game into an individual allocation task. Our results show that highly productive workers do not take employment of low productive workers into account when making wage proposals, regardless of whether insiders determine the wage or all workers. The level of pro-social preferences is small in the voting game, while it increases as the game is transformed into an individual allocation task. We interpret this as an accountability effect.

Keywords: social preferences, wage bargaining, accountability, collective decision making

JEL Classification: C91, C92, D71, J51, J52

Suggested Citation

Kocher, Martin G. and Poulsen, Odile M. and Zizzo, Daniel John, Social Preferences, Accountability, and Wage Bargaining (September 10, 2012). Available at SSRN: https://ssrn.com/abstract=2150549 or http://dx.doi.org/10.2139/ssrn.2150549

Martin G. Kocher

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

Göteborg University - School of Business, Economics and Law ( email )

Vasagatan 1
Goteborg, 40530
Sweden

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Odile M. Poulsen

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom

Daniel John Zizzo (Contact Author)

University of Queensland ( email )

St Lucia QLD 4072, Australia
Brisbane, Queensland
Australia

HOME PAGE: http://www.danielzizzo.com

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