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Anatomy of a contract change
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Jayaraman, Rajshri, Ray, Debraj and de Véricourt, Francis (2016) Anatomy of a contract change. American Economic Review, 106 (2). pp. 316-358. doi:10.1257/aer.20141122 ISSN 0002-8282.
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Official URL: http://dx.doi.org/10.1257/aer.20141122
Abstract
We study a contract change for tea pluckers on an Indian plantation, with a higher government-stipulated baseline wage. Incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20 to 80 percent. This response contradicts the standard model and several variants, is only partly explicable by greater supervision, and appears to be "behavioral." But in subsequent months, the increase is comprehensively reversed. Though not an unequivocal indictment of "behavioral" models, these findings suggest that nonstandard responses may be ephemeral, and should ideally be tracked over an extended period of time. (JEL D82, D86, J33, J41, J43, O13, Q12)
Item Type: | Journal Article | ||||||
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Divisions: | Faculty of Social Sciences > Economics | ||||||
Journal or Publication Title: | American Economic Review | ||||||
Publisher: | American Economic Association | ||||||
ISSN: | 0002-8282 | ||||||
Official Date: | February 2016 | ||||||
Dates: |
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Volume: | 106 | ||||||
Number: | 2 | ||||||
Page Range: | pp. 316-358 | ||||||
DOI: | 10.1257/aer.20141122 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Restricted or Subscription Access |
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