The Uncertain Fair Wage-Effort Hypothesis and Wage Secrecy
Texas A&M University - Department of Economics; National Bureau of Economic Research (NBER)
In this paper, we introduce uncertainty into Akerlof and Yellen (1990)'s fair wage effort hypothesis. In this uncertain fair wage hypothesis, employers do not have perfect information concerning an employee's perception of a fair wage, but assume the perceived fair wage is distributed as a random variable with a known distribution. Our wage model, built on this hypothesis, can be applied to analyze the widely adopted policy of wage secrecy.
Number of Pages in PDF File: 13
Keywords: Uncertainty, Fairness, Wage Secrecy
JEL Classification: J3
Date posted: January 4, 2001