- Size doesn't matter!: gift exchange in experimental labor markets
- Number of pages
- Amsterdam: Faculteit Economie en Bedrijfskunde
- CREED working paper series
- Volume | Edition (Serie)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
We study how the number of traders affects the interaction between a centralized
exchange and bilateral negotiations in an experimental labor market with excess supply
and incomplete contracts. In bilateral negotiations firms obtain information about
employees’ performance in previous jobs. Though market forces put a downward
pressure on wages in large markets, reciprocal tendencies do not differ. Hence, the
occurrence of bilateral negotiations increases overall efficiency in both market sizes.
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