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The Impact Of Social Comparisons On Reciprocity

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  • Simon Gaechter

    ()
    (University of Nottingham)

  • Daniele Nosenzo

    (University of Nottingham)

  • Martin Sefton

    (University of Nottingham)

Abstract

This paper investigates how social comparison information about referent others (i.e. learning what similar others do and how they are treated) affects reciprocal relationships. Using a three-person gift-exchange game we study how employees’ reciprocity towards an employer is affected by exposure to pay comparison information (what co-workers earn) and effort comparison information (how co-workers perform). We find that pay comparison information does not affect reciprocity. Effort comparison information, however, influences reciprocal relationships in important ways: the ability to observe reciprocal behavior on the part of others strongly affects employees’ reciprocity towards the employer. While our data show that social information in principle may either erode or amplify reciprocal relationships, we find that, on average, social comparisons have a detrimental impact on reciprocity.

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Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2010-10.

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Date of creation: May 2010
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Handle: RePEc:cdx:dpaper:2010-10

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Keywords: Reciprocity; gift-exchange; social information; social comparisons; pay comparisons;

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