Do Discriminatory Pay Regimes Unleash Antisocial Behavior?

CEGE Discussion Paper No. 315

44 Pages Posted: 1 Jul 2017

See all articles by Kerstin Grosch

Kerstin Grosch

Institute for Advanced Studies (IHS)

Holger Andreas Rau

University of Goettingen (Gottingen)

Date Written: June 29, 2017

Abstract

In this paper, we analyze how pay-regime procedures affect antisocial behavior at the workplace. In a real-effort experiment we vary two determinants of pay regimes: discrimination and justification of payments by performance. In our Discrimination treatment half of the workforce is randomly selected and promoted and participate in a tournament (high-income workers) whereas the other half receives no payment (low-income workers). Afterwards, antisocial behavior is measured by a Joy-of-Destruction game where participants can destroy canteen vouchers. The data show that low-income workers destroy significantly more vouchers than high-income workers. Destruction behavior is driven by workers who receive payments that are not justified by performance. When all payments are justified, that is in our Competition treatment where all workers participate in a tournament, the difference vanishes. By using a treatment with random payments, we show that unjustifiably-paid workers destroy less when they had equal opportunities to receive a high payment, i.e., when they were not discriminated by the pay regime.

Keywords: Antisocial Behavior, Discrimination, Experiment, Joy of Destruction

JEL Classification: C91, D03, J33, J70, M52

Suggested Citation

Grosch, Kerstin and Rau, Holger Andreas, Do Discriminatory Pay Regimes Unleash Antisocial Behavior? (June 29, 2017). CEGE Discussion Paper No. 315, Available at SSRN: https://ssrn.com/abstract=2994877 or http://dx.doi.org/10.2139/ssrn.2994877

Kerstin Grosch (Contact Author)

Institute for Advanced Studies (IHS) ( email )

Josefstädter Straße 39
1080 Vienna
Austria

Holger Andreas Rau

University of Goettingen (Gottingen) ( email )

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

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