- A-Z
- Jena Economic Resea...
- Volume 2
- Downsizing the Labo...
- Autor(in)
- Erschienen
- 12. November 2008
- Nummer des Discussion-Papers
-
2008-087
- Schlagwort(e)
-
downsizing
experimental economics
labor economics
principal-agent model
- Zusammenfsg.
-
One may hope to capture the behavioral and emotional effects of downsizing the labor force in rather abstract settings as an ultimatum game (see Fischer et al. (2008)), or try to explore downsizing in its more natural principalagent scenario with a labor market background. We pursue the latter approach and test experimentally whether downsizing occurs whenever (game) theoretically predicted and whether effort reactions question its profitability. Our main findings are that downsizing seems to happen less often than predicted and that its frequency does not depend on whether, theoretically, its gains are rather large or small. Interestingly, we also find strong evidence that piece-rate offers are used in a suboptimal way.
- article pub. typess JER
- Research article
- article languages JER
- Englisch
- article research fields JER
- experimental economics
- JEL-Classification for JER
- C72 - Noncooperative Games ; C91 - Laboratory, Individual Behavior ; D21 - Firm Behavior ; J01 - Labor Economics: General