An intriguing illustration of (potentially) unintended outcomes can be found in the realm of 'pay transparency' policies/legislation. Recent research indicates that these measures, which aim to promote wage equality among workers, can actually stifle pay growth instead.

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Our model predicts that transparency reduces the individual bargaining power of workers, leading to lower average wages. A key insight is that employers credibly refuse to pay high wages to any one worker to avoid costly renegotiations with others under transparency. 
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