Subject ▸ Warm Glow

It’s Not You, It’s Me: An Experimental Study of Employers’ Wage Setting Behavior

Using an intergenerational trilateral laboratory gift-exchange game, we investigate how employers’ own performance in a real effort task impacts on the wage setting behavior of younger and older employers. We find that the employers’ own past performance strongly affects wage setting behavior, though we do not find significant differences concerning the employers’ or employees’ age.