Behavioral Economics Essay -- Neo-economists, Labor Market

IntroductionDescribed as the stinting field that deals with the abridgment of the effect that the process of decision making impacts on the decisions reached, behavioral economics is a field that has elicited lots of interest from various scholars (Altman, 24). The economists deem this branch of economics as cognitive science due to the detail that it deals with analysis of the process of decision making. Eric Wanner one of the earlier founders of the discipline describes this economic field as a component of cognitive science in his attempt to explain the basis and the characteristic analysis of the discipline in terms of strengths and weaknesses. Simply put it is a field of economic that explains the decision making process of economic agents based on theories formulated in its different branches (Altman, 25-26). Behavioral economics is a diverse subject dealing with numerous topics but for purposes of this search paper, my focus will be on the labor market integrity and re ciprocity. Employees as well as their applyers see financial interests for which they desire to achieve from their entry into the labor market or the industry for which the employers argon recruiting employee (Altman, 29-30). The employee will always seem to reciprocate all especial(a) pay from the employer with additional input whereas the employer will give incentives to uphold extra output.Literature reviewNeo-economists describe the labor market as one having employees who puzzle out for a wage and employers who pay wages for the work performed. Arkelof theory on join wage stated that for an employer to pay extra money to the employee the employee always viewed the extra money as mere payment for the above average work that they performed (Colin, 2010... ...effort in the tasks they perform. Fairness by the employer is the epitope in the level of output from an employee. The essay has also illustrated the impact that fairness and reciprocity has on the nature or mix of employment contracts that an employer decides to employ for the different tasks performed by the different employees. There are two classes of employee whatsoever employees fall in the category of fair employees while the rest are trust employee. Most employees however are fair employees who expect fair treatment from their employers in order for them to reciprocate the generosity with increased output. The closely popular kind of engagement is the bonus reward system. Further research needs to be carried out in determination of the relationship mingled with fairness and reciprocity in the labor market and demand of goods of game quality at the product market.