Work

Transaction Frame Determines Preferences: Valuation of Labor by Employee and Contractor

Year: 2020

Type: article

Abstract: A major concern in today’s economic reality is the extent to which a sharing economy, in comparison with a traditional economy, promotes inequality. In the transformation from a traditional to a sharing economy, wage setting is replaced by contract pricing. The switch to contract trading implies that the party who carries out the labor evaluates the transaction from a buyer’s rather than a seller’s perspective. Drawing on psychological research on constructed and reference-dependent preferences, we predicted that the net valuation of work would decrease when the regimen involved contract trading. Three experiments ( N = 1,105) eliciting work valuation under the two regimens confirmed our prediction, thus pointing to a novel factor that increases inequality.

Source: Psychological Science

DOI: 10.1177/0956797620916521

Authors: Ilana Ritov, Amos Schurr

Institutions: Hebrew University of Jerusalem, Ben-Gurion University of the Negev

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,000