Why the Referential Treatment: Evidence from Field Experiments on Referrals

Pallais, Amanda; Sands, Emily Glassberg

doi:10.3386/w21357

Cited by 21 publications

(23 citation statements)

References 14 publications

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“…To date, there has been relatively little work examining the nature of online labor markets. Most studies have focused on using them as a testing domain for some question of broader interest, such as Pallais (2014) and Pallais and Sands (2016). However, exceptions include Horton (2010), Kittur et al (2013), and Horton (2011).…”

Section: Why Should We Care Aboutmentioning

confidence: 97%

Research Note—Are Online Labor Markets Spot Markets for Tasks? A Field Experiment on the Behavioral Response to Wage Cuts

Chen

Horton

2016

Information Systems Research

106

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I n some online labor markets, workers are paid by the task, choose what tasks to work on, and have little or no interaction with their (usually anonymous) buyer/employer. These markets look like true spot markets for tasks rather than markets for employment. Despite appearances, we find via a field experiment that workers act more like parties to an employment contract: workers quickly form wage reference points and react negatively to proposed wage cuts by quitting. However, they can be mollified with "reasonable" justifications for why wages are being cut, highlighting the importance of fairness considerations in their decision making. We find some evidence that "unreasonable" justifications for wage cuts reduce subsequent work quality. We also find that not explicitly presenting the worker with a decision about continuing to work eliminates "quits," with no apparent reduction in work quality. One interpretation for this finding is that workers have a strong expectation that they are party to a quasi-employment relationship where terms are not changed, and the default behavior is to continue working.

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Section: Why Should We Care Aboutmentioning

confidence: 97%

Research Note—Are Online Labor Markets Spot Markets for Tasks? A Field Experiment on the Behavioral Response to Wage Cuts

Chen

Horton

2016

Information Systems Research

106

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“…A recent set of labor and credit market experiments investigate whether the network does in fact possess valuable information and if individuals can be provided with incentives for truthful revelation. Pallais and Sands (2014) conducted job referrals experiments in an online labor market. They asked previous employees to refer workers and compared the referred applicants to applicants who responded to an online job posting.…”

Section: Strategic Information Diffusionmentioning

confidence: 99%

Field Experiments, Social Networks, and Development

Breza

2016

The Oxford Handbook of the Economics of Networks

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This chapter explores the use of field experiments as a tool to study the economics of social networks, with an emphasis on applications in development economics. Field experiments can be powerful vehicles to measure causal treatment effects. However, when treatments “spill over” onto others in the social network, many new considerations arise. The chapter begins with a discussion of methodological challenges involved in conducting social network experiments. The chapter then explores how field experiments have begun to shed light on five key issues in the economics of networks, including social learning and diffusion, other-regarding preferences, peer monitoring and enforcement, risk sharing, and network formation.

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“…In particular, a well-established literature argues that they help to screen candidates and improve the quality of matching on unobservable characteristics (Saloner (1985), Montgomery (1991), Simon and Warner (1992), Beaman and Magruder (2012), Galenianos (2013), Dustmann et al (2015), Hensvik and Skans (2016)). They can also reduce moral hazard, since a social network may monitor and exert pressure on a worker who was hired through it (Kugler (2003), Bandiera et al (2013), Berardi (2013), Heath (2018) or foster on-the-job complementarities (Bandiera et al (2005), Pallais and Sands (2016)). 2 Networks not only affect the probability of getting a job or a promotion, but they may have an impact on wages in a given job.…”

Section: Literature Reviewmentioning

confidence: 99%

Professional Networks and their Coevolution with Executive Careers

2019

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This paper examines how networks of professional contacts contribute to the development of the careers of executives of North American and European companies. We build a dynamic model of career progression in which career moves may both depend upon existing networks and contribute to the development of future networks. We test the theory on an original dataset of nearly 73 000 executives in over 10 000 firms. In principle professional networks could be relevant both because they are rewarded by the employer and because they facilitate job mobility. Our econometric analysis suggests that, although there is a substantial positive correlation between network size and executive compensation, with an elasticity of around 20%, almost all of this is due to unobserved individual characteristics. The true causal impact of networks on compensation is closer to an elasticity of 1 or 2% on average, all of this due to enhanced probability of moving to a higher-paid job. And there appear to be strongly diminishing returns to network size. RÉSUMÉCe papier étudie la manière dont les réseaux de contacts professionnels contribuent au développement des carrières de cadres dirigeants en Amérique du Nord et en Europe. Nous modélisons de façon dynamique les évolutions de ces carrières comme résultant du réseau existant et également comme contribuant au développement du réseau futur. Nous testons cette théorie à l'aide de données originales concernant presque 73 000 cadres dirigeants dans plus de 10 000 entreprises. En principe, les réseaux professionnels ont un impact car ils peuvent être rémunérés par l'employeur et peuvent également faciliter la mobilité professionnelle. Notre analyse économétrique suggère que, même s'il existe une élasticité autour de 20% entre la taille du réseau et la rémunération des cadres dirigeants, la presque totalité de celle-ci est due aux caractéristiques inobservables des individus. Le vrai effet causal des réseaux sur la rémunération des cadres dirigeants est plutôt autour de 1-2% en moyenne et résulte principalement d'une plus grande probabilité d'obtenir un travail mieux rémunéré. L'effet des réseaux apparait également être caractérisé par des rendements fortement décroissants. Mots-clés : réseau professionnel, mobilité professionnelle, rémunération des cadres dirigeantsLes Documents de travail reflètent les idées personnelles de leurs auteurs et n'expriment pas nécessairement la position de la Banque de France. Ils sont disponibles sur publications.banque-france.fr

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Why the Referential Treatment: Evidence from Field Experiments on Referrals

Cited by 21 publications

References 14 publications

Research Note—Are Online Labor Markets Spot Markets for Tasks? A Field Experiment on the Behavioral Response to Wage Cuts

Research Note—Are Online Labor Markets Spot Markets for Tasks? A Field Experiment on the Behavioral Response to Wage Cuts

Field Experiments, Social Networks, and Development

Professional Networks and their Coevolution with Executive Careers

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