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Social Choice and Welfare

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07-02-2017 | Original Paper

Social preferences, accountability, and wage bargaining

Authors: Martin G. Kocher, Odile Poulsen, Daniel J. Zizzo

Published in: Social Choice and Welfare | Issue 3/2017

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Abstract

We experimentally test preferences for employment in a collective wage bargaining situation with heterogeneous workers. We vary the size of the union and introduce a treatment mechanism transforming the voting game into an individual allocation task. Our results show that highly productive workers do not take employment of low productive workers into account when making wage proposals, regardless of whether only union members determine the wage or all workers. The level of pro-social preferences is small in the voting game, but it increases if the game becomes an individual allocation task. We interpret this as an accountability effect.

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The standard dictator “game” is a two-person allocation task in which one person (the “dictator”) receives a positive endowment and can transfer any amount between zero and the endowment to a powerless recipient.

For accountability research in the context of risky decision making see Pahlke et al. (2012) and Vieider (2012). The term “moral wiggle room” has also been used to describe decisions in which one finds an easy excuse for a selfish decision (Dana et al. 2007).

This might itself have an effect on behavior, but we are not aware of any study that alters the level of interaction within a group systematically (see also Kocher and Sutter 2007). For surveys, see Charness and Sutter (2012) and Kugler et al. (2012).

An assignment according to the performance in a task would most likely reinforce our results regarding selfish behavior, because participants would perceive their position as earned rather than just assigned.

For reasons of comparability to experiments planned in the future, we decided to frame the ten decisions as five periods, each consisting of two identical stages, in the experimental instructions.

In order to simplify the analysis we set \(Q_3 = 100/3\) (instead of 33).

The first is a control for experimenter demand (Zizzo 2010); the second is a control for intellectual curiosity.

As we did not get interesting results using these variables (apart possibly from a small effect of higher generosity by women subjects), they are not referred to further in this paper.

All p-values reported in this paper are based on two-sided hypothesis tests.

An online appendix shows the distribution of wage proposals, split up according to treatments and types.

Note that, while the coefficient on Ex Ante is positive (if statistically insignificant), the one on Type 1 x Ex Ante more than offsets it by over 2 to 1.

This is found combining the coefficients onType 1, Inequality averse and Type 1 x Inequality averse with Type 5 as the reference category.

Adding a q=1-related set of dummy variables in the regressions does not change our conclusion. Hence, the exact specification does not seem to be an explanation.

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Title: Social preferences, accountability, and wage bargaining
Authors: Martin G. Kocher
Odile Poulsen
Daniel J. Zizzo
Publication date: 07-02-2017
Publisher: Springer Berlin Heidelberg
Published in: Social Choice and Welfare / Issue 3/2017
Print ISSN: 0176-1714
Electronic ISSN: 1432-217X
DOI: https://doi.org/10.1007/s00355-017-1028-x

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