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Gift Exchange in a Multi-Worker Firm

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Author Info
Sandra Maximiano
Randolph Sloof
Joep Sonnemans

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Abstract

One of the main findings of a large body of gift exchange experiments is that a considerable fraction of workers reward higher wages with higher effort. These results are observed for simple one-employer-one-worker relationships. In this article we investigate whether they generalise to the more realistic situation in which the employer employs several workers. We compare a bilateral gift exchange game with a treatment in which each employer has four workers. We find that effort levels in the latter treatment are only marginally lower. Gift exchange thus appears to be robust to increases in the size of the workforce. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0297.2007.02065.x
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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 117 (2007)
Issue (Month): 522 (07)
Pages: 1025-1050
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Handle: RePEc:ecj:econjl:v:117:y:2007:i:522:p:1025-1050

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  13. Brandts, J. & Charness, G., 1998. "Hot Vs. Cold: Sequential Responses and Preference Stability in Experimental Games," UFAE and IAE Working Papers 424.98, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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  14. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May. [Downloadable!] (restricted)
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  16. Claude Meidinger & Jean-Louis Rullière & Marie-Claire Villeval, 2001. "Free-riding and Fairness in Principal-Multi-Agent Relationships: Experimental Evidence," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00151509_v1, HAL. [Downloadable!]
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  19. Baker, G.P. & Jensen, M.C. & Murphy, K.J., 1988. "Compensation And Incentives: Practice Vs. Theory," Papers 88-05, Rochester, Business - Managerial Economics Research Center.
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  20. Fehr, Ernst, et al, 1998. "When Social Norms Overpower Competition: Gift Exchange in Experimental Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 324-51, April. [Downloadable!] (restricted)
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  22. Gary E. Bolton & Axel Ockenfels, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robert Dur & Hein Roelfsema, 2006. "Social Exchange and Common Agency in Organizations," Working Papers 06-11, Utrecht School of Economics. [Downloadable!]
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  2. Christian Grund & Niels Westergaard-Nielsen, 2005. "The Dispersion of Employees' Wage Increases and Firm Performance," Bonn Econ Discussion Papers bgse3_2005, University of Bonn, Germany. [Downloadable!]
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  3. Johannes Abeler & Stefen Altmann & Sebastian Kube & Matthias Wibral, 2009. "Gift Exchange and Workers' Fairness Concerns - When Equality Is Unfair," Discussion Papers 2009-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham. [Downloadable!]
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  4. Johannes Abeler & Steffen Altmann & Sebastian Kube & Matthias Wibral, 2006. "Reciprocity and Payment Schemes: When Equality Is Unfair," IZA Discussion Papers 2500, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Gächter, Simon & Nosenzo, Daniele & Sefton, Martin, 2008. "The Impact of Social Comparisons on Reciprocity," IZA Discussion Papers 3639, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Sandra Maximiano & Randolph Sloof & Joep Sonnemans, 2006. "Gift Exchange and the Separation of Ownership and Control," Tinbergen Institute Discussion Papers 06-037/1, Tinbergen Institute. [Downloadable!]
  7. Dennis A.V. Dittrich & Anthony Ziegelmeyer, 2006. "Laboratory Bilateral Gift Exchange: The Impact of Loss Aversion," Papers on Strategic Interaction 2005-34, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  8. Lisa Anderson & Jennifer Mellor & Jeffrey Milyo, 2006. "Induced heterogeneity in trust experiments," Experimental Economics, Springer, vol. 9(3), pages 223-235, September. [Downloadable!] (restricted)
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