Experimental Design
In this study, the focus is on how workers negotiate their payoffs. The workers negotiate a fixed portion of their pay before putting in effort to complete a task. The study aims to investigate the impact of climate change on workers' negotiation wage outcomes and productivity. Specifically, the negative impact of El Nino from 2023 to 2025 and the different levels of employability in different tourist seasons in the region will be taken into account. The study employs a between-subjects design and varies negotiation structures by informing workers if they can make the first offer. The aim is to examine how workers' negotiated wages, productivity, and changes over time vary across treatments in response to the possibility of negotiation structures and climate change.
Experimental Design Details
1. Recruitment
We are conducting a lab-in-the-field experiment in Boyaca, Colombia, which involves recruiting workers aged between 18 to 65 years old from local companies such as hotels, restaurants, tourist stores, farms, wineries, etc. The workers are invited to participate in our study.
2. Real Effort Task
Our primary research focus is on the negotiation ability of workers with respect to their wages and productivity. We examine how the negotiated wages and productivity change over time in the real-effort task. Our real-effort task design is similar to that of Brown et al. (2017). During the experiment, each worker is given a large bag containing 1000 blue, 1000 red, and 1000 yellow bingo chips. They must sort the chips into three different bowls assigned to each color for fifteen minutes. Before starting the task, the workers negotiate their wages with the researcher. They receive a fixed wage that is negotiated before exerting effort in the task.
3. Treatments
Our experiment employs a between-subjects design and involves two treatments, excluding the Baseline. In the Baseline (No Negotiation), workers receive a fixed payment of $5 for their productivity and an additional variable payment of $0.02 for every sorted chip. In the treatment with forced negotiation (hereafter called Forced), individual workers are given the opportunity to name their price for their 15-minute work, and the researcher provides a counteroffer based on the named value. The researcher (i.e. the "employer") offers workers the chance to name their price first (i.e. "the first offer") in this treatment. Conversely, in the other treatment, called Choice, the researcher gives the initial offer. In the treatment with choice, individual workers hear the initial offer for the 15-minute work, and they can respond with a counteroffer based on the value.
When implementing the forced negotiation treatment, some individual workers may not wish to provide the initial offer themselves, and may instead request the researcher to provide it for them regarding the 15-minute work. In such instances, the forced treatment automatically becomes the choice treatment method. Thus, this endogenous ‘treatment’ will be called E_choice.
In each treatment (except the baseline), the negotiation structure allows for three stages of negotiation (two counteroffers from the worker). The two treatments will happen simultaneously with and without El Nino, creating four treatments.
The lab-in-the-field study aims to answer the following research questions:
- Do workers negotiate wages differently in regions impacted by climate change?
- Does climate change affect the gender wage gap in negotiations?
- Does productivity decrease when climate change hits the region where workers reside?
- Are there differences in negotiation strategies between male and female workers when climate change impacts their region?
- Do gender-based beliefs play a significant role in wage negotiations during climate change stressors?
- Can different negotiation structures impact the gender wage gap in the face of climate change?