Effort Transparency and Fairness

30 Pages Posted: 30 Nov 2023

See all articles by Joy Buchanan

Joy Buchanan

Samford University

Elif E. Demiral

East Tennessee State University - College of Business and Technology

Ümit Saglam

East Tennessee State University

Date Written: November 15, 2023

Abstract

We study how transparent information about effort impacts the allocation of earnings in a dictator game experiment. We manipulate information about the respective contributions to a joint endowment that a dictator can keep or share with a counterpart. A Humanomics framework for understanding human behavior predicts that subjects in the laboratory may give up money to follow rules of conduct that they learned in society. We observe, accordingly, that many dictators follow a meritocracy norm even if the receiver cannot observe them. However, receivers get higher payments on average when there is complete transparency about effort provision for the earned endowment. Under conditions of non-transparency, some dictators take the opportunity to give less because the receiver will not know what the fair allocation would have been. This confirms previous findings about social distance and how subjects react to the possibility of disappointing observers. Our results imply that outcomes for employees within organizations can be affected by the level of transparency for effort contribution.

Keywords: transparency, effort, fairness, information, experiment

JEL Classification: C7, C9, D8, D9

Suggested Citation

Buchanan, Joy and Demiral, Elif E. and Saglam, Ümit, Effort Transparency and Fairness (November 15, 2023). Available at SSRN: https://ssrn.com/abstract=4633450 or http://dx.doi.org/10.2139/ssrn.4633450

Joy Buchanan

Samford University ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States

Elif E. Demiral (Contact Author)

East Tennessee State University - College of Business and Technology ( email )

United States

Ümit Saglam

East Tennessee State University ( email )

Department of Management and Marketing
PO Box 70625
Johnson City, TN 37614
United States
423-439-1000 (Phone)
423-439-4422 (Fax)

HOME PAGE: http://https://sites.google.com/view/umitsaglam/home

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