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Hilton Atlanta, 216
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Society for the Advancement of Behavioral Economics
how those beliefs affect their own behavior. We conducted a field experiment with a
sample of 2,000 employees from a multi-billion-dollar corporation. We combine rich
data from surveys and administrative records with an experiment that provided some
employees with accurate information about the salaries of others. First, we document
large misperceptions about salaries and identify some of the sources of these misperceptions.
Second, we find significant behavioral elasticities with respect to the perceived
salaries of other employees. These effects are different for horizontal and vertical comparisons:
while higher perceived peer salary decreases effort, output and retention,
higher perceived manager salary has a positive effect on those same outcomes. We discuss
evidence on the underlying mechanisms, and implications for pay inequality and
pay transparency.
Social Preferences with Not WEIRD (Western Educated Industrialized Rich Democratic) People
Paper Session
Sunday, Jan. 6, 2019 10:15 AM - 12:15 PM
- Chair: Hernan D. Bejarano, CIDE/ESI
How Much Does Your Boss Make? The Effects of Salary Comparisons
Abstract
We study how employees learn about the salaries of their peers and managers, andhow those beliefs affect their own behavior. We conducted a field experiment with a
sample of 2,000 employees from a multi-billion-dollar corporation. We combine rich
data from surveys and administrative records with an experiment that provided some
employees with accurate information about the salaries of others. First, we document
large misperceptions about salaries and identify some of the sources of these misperceptions.
Second, we find significant behavioral elasticities with respect to the perceived
salaries of other employees. These effects are different for horizontal and vertical comparisons:
while higher perceived peer salary decreases effort, output and retention,
higher perceived manager salary has a positive effect on those same outcomes. We discuss
evidence on the underlying mechanisms, and implications for pay inequality and
pay transparency.
Experiments on Kinship, Culture and Favoritism
Abstract
We conduct lab-in-the-field experiments in two Ecuadorian regions to test theories of kinship- and culture-driven favoritism in bargaining games designed to mimic corrupt dealings with negative externalities that result from favoritism. We vary the assignment of subjects to roles, so that they bargain with kin, non-kin co-villagers and distant strangers to test the impact of kinship and shared ethnicity/culture on favoritism within-village. We conduct the same experiments in two different regions which have different cultural attitudes toward marriage practices and family structures, allowing us to test whether favoritism varies with the structure of kinship/marriage ties.Who Is More Generous with the Most Needy? Experimental Evidence from Bogota's Stratification
Abstract
Over decades, scholars have tried to understand the relationship between generosity and wealth. However, household wealth is not easy to observe without error. It is either self-reported or artificially created in experimental settings. Moreover, comparing generosity of the rich with the poor presents a challenge, since the rich have more monetary resources than the poor to act generously. To address these concerns, we take advantage of a unique feature of the city of Bogota. Bogota is divided by law into six socio-economic strata which are close proxies of household wealth and income. We recruit subjects from different strata and run a series of double-blinded dictator games where the recipient is the NGO Techo-Colombia, which builds transitional housing for homeless families. We twist the design of our experiments to identify the stratum of each subject anonymously and blindly, and match their donations with their stratum. In a first experiment we provide a fix endowment to all participants and find that, compared to the poor, the rich donate more. However, in a second experiment, we show that this is not because the rich are intrinsically more generous, but because the experimental endowment has lower real value for them. When we use a strategy-method with endowments equivalent to the average daily expenditure of the strata, we find that both rich and poor are equally generous. The rich and the poor are equally likely to donate, and those who donate, give a similar proportion of their strata-equivalent endowment. Moreover, using a matching design, we find that the motivation to donate is also similar across strata. Both, rich and poor generosity is explained more by a feeling of warm-glow rather than by pure altruism.Discussant(s)
Antonio Arechar
,
CIDE
Hernan D. Bejarano
,
Center for Research and Teaching in Economics (CIDE) and Chapman University
Brit Grosskopf
,
University of Exeter
Kristian Vargas
,
University of California-Santa Cruz
JEL Classifications
- D9 - Micro-Based Behavioral Economics
- B4 - Economic Methodology