Working more for more and working more for less : Labor supply in the gain and loss domains

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2024
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Cadsby, C. Bram
Song, Fei
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Labour Economics. Elsevier. 2024, 88, 102533. ISSN 0927-5371. eISSN 1879-1034. Verfügbar unter: doi: 10.1016/j.labeco.2024.102533
Zusammenfassung

We examine labor supply responses to piece rate changes relative to the reference piece rate (RR). In experimental conditions without RR, labor supply increases monotonically with the actual piece rate. In conditions with RR, labor supply increases both when the piece rate rises and falls relative to RR. This non-monotonicity in labor supply responses to piece rate changes around RR is consistent with the effects of framing a given level of income as gain or loss relative to the target level induced by RR: loss aversion makes subjects work more at a given piece rate when the implied income is in the loss rather than gain domain. However, the framing effects disappear when the piece rate could both rise or fall relative to RR.

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ISO 690CADSBY, C. Bram, Fei SONG, Nick ZUBANOV, 2024. Working more for more and working more for less : Labor supply in the gain and loss domains. In: Labour Economics. Elsevier. 2024, 88, 102533. ISSN 0927-5371. eISSN 1879-1034. Verfügbar unter: doi: 10.1016/j.labeco.2024.102533
BibTex
@article{Cadsby2024-06Worki-69580,
  year={2024},
  doi={10.1016/j.labeco.2024.102533},
  title={Working more for more and working more for less : Labor supply in the gain and loss domains},
  volume={88},
  issn={0927-5371},
  journal={Labour Economics},
  author={Cadsby, C. Bram and Song, Fei and Zubanov, Nick},
  note={Article Number: 102533}
}
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    <dcterms:abstract>We examine labor supply responses to piece rate changes relative to the reference piece rate (RR). In experimental conditions without RR, labor supply increases monotonically with the actual piece rate. In conditions with RR, labor supply increases both when the piece rate rises and falls relative to RR. This non-monotonicity in labor supply responses to piece rate changes around RR is consistent with the effects of framing a given level of income as gain or loss relative to the target level induced by RR: loss aversion makes subjects work more at a given piece rate when the implied income is in the loss rather than gain domain. However, the framing effects disappear when the piece rate could both rise or fall relative to RR.</dcterms:abstract>
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