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How does the preference for increasing payments depend on the size and source of the payments?

See on Scoop.itBounded Rationality and Beyond
Abstract: It is well-known that subjects can exhibit a preference for increasing payments. Smith (2009a) makes a related prediction that the difference between the preference increasing wage payments and the preference for increasing non-wage payments will be largest for intermediate payments. We find evidence consistent with this prediction. Consistent with previous experiments, we find that the preference for increasing payments is increasing in the size of the payments. Also consistent with the literature, we find that the preference for increasing wage payments is stronger than the preference for non-wage payments.
See on mpra.ub.uni-muenchen.de



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