Labor market experiments contradict the self-interested prediction of standard economic theory

Evidence

If employees are self-interested, they will choose to make no effort, no matter what wage is offered. Knowing this, employers will never pay more than the minimum necessary to get the employee to accept a contract. In fact, however, this self-interested outcome rarely occurs in the experiment, and the more generous the employer’s wage offer to the employee, the greater is the effort provided. In effect, employers presumed the cooperative predispositions of the employees, making quite generous wage offers and receiving greater effort, as a means to increase both their own and the employees’ payoff. More precisely, employees contributed in proportion to the wage proposed by their employer. — Nicolas Baumard, A mutualistic approach to morality, 150

Categorization

• XREF: This cleanly complements A Midwife’s Tale’s picture of reciprocity norms governing economic exchange — and connects to the Big God/partner choice framework in the reading purpose, where moral behavior is sustained less by pure self-interest than by reputational and relational mechanisms. — connects to: Narrow self-interest does not automatically produce efficient exchange; Economic assumptions of atomized action contradict observed social reality — Coleman, SocialCapitalCreation-1988, 20; Bargaining outcomes rest on convergent reflexive expectations, not on force or merit — Thomas C. Schelling, The Strategy of Conflict, 177 (+4 more)

Broader Connections

• Narrow self-interest does not automatically produce efficient exchange #corroborates (0.95)
• Economic assumptions of atomized action contradict observed social reality #corroborates (0.85) — Coleman, SocialCapitalCreation-1988, 20
• Bargaining outcomes rest on convergent reflexive expectations, not on force or merit #expands (0.80) — Thomas C. Schelling, The Strategy of Conflict, 177