Institutions and Contract Enforcement

• 成果类型: Article
• 署名作者: Falk, Armin; Huffman, David; Macleod, W. Bentley
• 署名单位: University of Bonn; University of Oxford; Columbia University
• 刊物名称: JOURNAL OF LABOR ECONOMICS
• ISSN/ISSBN: 0734-306X
• DOI: 10.1086/679673
• 发表日期: 2015
• 页码: 571-590
• 关键词: Employment protection; COMPENSATION; fairness; MARKETS; device; DESIGN

摘要

We conduct laboratory experiments where the market rules mimic labor market institutions and exogenously vary institutions to study the causal impact on subjects' behaviors. We focus on rules analogous to dismissal barrier institutions, such as employment protection legislation, and on institutions allowing bonus pay. We find that when constrained to fixed wage contracts, dismissal barriers reduce efficiency but parties react by evolving rising compensation profiles. When the option to pay bonuses is introduced, this completely offsets the negative effects of dismissal barriers. In the absence of dismissal barriers, bonus pay reduces frequency of repeated interactions but leaves market efficiency unchanged.