Information transparency, fairness and labor market efficiency

Ebru Işgin, Barry Sopher

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

We study the role of information transparency on fairness, welfare and efficiency in long-term employment relationships. When information on the firms' productivity and surplus is revealed, wage offers represent larger shares of potential gains for workers who, in return, respond with higher performance. Workers respond not only to wages, but also to firms' intentions concerning fairness. We find that, in long-term relationships, transparency is a strong mechanism to promote performance and welfare. It naturally improves relationships between firms and workers, increases workers' welfare, profits from low productivity jobs and boosts the labor market efficiency.

Original languageEnglish (US)
Pages (from-to)33-39
Number of pages7
JournalJournal of Behavioral and Experimental Economics
Volume58
DOIs
StatePublished - Oct 1 2015

All Science Journal Classification (ASJC) codes

  • Applied Psychology
  • Social Sciences(all)
  • Economics and Econometrics

Keywords

  • Efficiency
  • Fairness
  • Incomplete contracts
  • Information transparency

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