Size doesn't matter! Gift exchange in experimental labor markets

Jordi Brandts, Klarita Gërxhani, Arthur Schram, Jolanda Ygosse-Battisti

    Research output: Contribution to journalArticleResearchpeer-review

    6 Citations (Scopus)

    Abstract

    We study how the number of traders affects the interaction between a centralized exchange and bilateral negotiations in an experimental labor market with excess supply and incomplete contracts. Our large markets are three times as large as our small markets. In bilateral negotiations firms obtain information about employees' performance in previous jobs. Though market forces put a downward pressure on wages in large markets, reciprocal tendencies do not differ. Hence, the occurrence of bilateral negotiations increases overall efficiency for both market sizes. © 2010 Elsevier B.V.
    Original languageEnglish
    Pages (from-to)544-548
    JournalJournal of Economic Behavior and Organization
    Volume76
    Issue number3
    DOIs
    Publication statusPublished - 1 Jan 2010

    Keywords

    • Experiments
    • Gift exchange
    • Market size
    • Worker recruitment

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