- Size doesn’t matter! Gift exchange in experimental labor markets
- Journal of Economic Behavior & Organization
- Volume | Issue number
- 76 | 3
- Pages (from-to)
- Document type
- Faculty of Law (FdR)
Faculty of Social and Behavioural Sciences (FMG)
- Amsterdam Institute for Advanced Labour Studies (AIAS)
Amsterdam Institute for Social Science Research (AISSR)
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. Our large markets are three times as large as our small markets. 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 for both market sizes.
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