Fair Wages and Multiple Fairness Standards - A Lab Study of Co-Employment of Hired and Rented Hands

Schmalenbach Business Review, Vol. 59, January 2007

28 Pages Posted: 13 Jul 2007

See all articles by Dorothea Alewell

Dorothea Alewell

Friedrich-Schiller-University Jena

Colette Friedrich

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Werner Güth

Max Planck Institute for Research on Collective Goods; Luiss Guido Carli University

Abstract

We study the relevance of fairness norms in an experimental scenario in which hired and rented hands are co-employed and stochastic influences and multiple reference points for fairness further increase complexity. Co-employment of hired and rented hands is an example out of a broader class of situations with multiple fairness standards. Co-employment has high political relevance and topicality in Europe, and especially in Germany, where a new equal payment rule affecting temporary work agencies has become law. To shed new light on the relevance of fairness norms in complex settings, we explore theoretically and experimentally the possible fairness considerations of the participants.

Keywords: Fairness, Principal-agent Problem, Temporary Agency Work, Wage Discrimination

JEL Classification: C7, C91, D23

Suggested Citation

Alewell, Dorothea and Friedrich, Colette and Güth, Werner, Fair Wages and Multiple Fairness Standards - A Lab Study of Co-Employment of Hired and Rented Hands. Schmalenbach Business Review, Vol. 59, January 2007, Available at SSRN: https://ssrn.com/abstract=960674

Dorothea Alewell (Contact Author)

Friedrich-Schiller-University Jena ( email )

Department of Economics & Business Administration
Carl-Zeiss-Str. 3
07743 Jena
Germany
+49-(0)3641-943130 (Phone)

Colette Friedrich

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Werner Güth

Max Planck Institute for Research on Collective Goods

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Luiss Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

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