13 Pages Posted: 4 Jan 2001
Date Written: September 2000
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.
Keywords: Uncertainty, Fairness, Wage Secrecy
JEL Classification: J3
Suggested Citation: Suggested Citation
By Hideshi Itoh