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Timing of Kindness - Evidence from a Field Experiment

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  • Axel Ockenfels
  • Dirk Sliwka
  • Peter Werner

Abstract

We conduct a field experiment in a naturally occurring labor environment and track whether the performance of workers responds to unexpected wage increases. Specifically, we investigate how the timing of wage increases affects efforts. We find that workers’ performance is about 11% higher for the same total wage when their wage is increased in two steps as opposed to a single increase at the outset. Moreover, workers are more honest and are more willing to do voluntary extra work after surprising wage increases compared to a baseline condition without increases.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4885.

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Date of creation: 2014
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Handle: RePEc:ces:ceswps:_4885

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Related research

Keywords: gift exchange; positive reciprocity; field experiment; honesty;

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  1. Gill, David & Prowse, Victoria & Vlassopoulos, Michael, 2013. "Cheating in the workplace: An experimental study of the impact of bonuses and productivity," MPRA Paper 50166, University Library of Munich, Germany.
  2. Heike Hennig-Schmidt & Bettina Rockenbach & Abdolkarim Sadrieh, 2005. "In search of worker's real effort reciprocity - a field and a laboratory experiment," Artefactual Field Experiments, The Field Experiments Website 00065, The Field Experiments Website.
  3. Kosfeld, Michael & Neckermann, Susanne, 2010. "Getting More Work for Nothing? Symbolic Awards and Worker Performance," IZA Discussion Papers 5040, Institute for the Study of Labor (IZA).
  4. David K Levine, 1997. "Modeling Altruism and Spitefulness in Experiments," Levine's Working Paper Archive 2047, David K. Levine.
  5. Uri Gneezy & John A. List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," NBER Working Papers 12063, National Bureau of Economic Research, Inc.
  6. Bellemare, Charles & Shearer, Bruce, 2009. "Gift giving and worker productivity: Evidence from a firm-level experiment," Games and Economic Behavior, Elsevier, Elsevier, vol. 67(1), pages 233-244, September.
  7. Sebastian Kube & Michel André Maréchal & Clemens Puppe, 2010. "The currency of reciprocity - gift-exchange in the workplace," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 377, Institute for Empirical Research in Economics - University of Zurich, revised Aug 2011.
  8. Matthieu Chemin & Joost DeLaat & André Kurmann, 2011. "Reciprocity in Labor Relations: Evidence from a Field Experiment with Long-Term Relationships," Cahiers de recherche, CIRPEE 1127, CIRPEE.
  9. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, American Economic Association, vol. 83(5), pages 1281-1302, December.
  10. Craig E. Landry & Andreas Lange & John A. List & Michael K. Price & Nicholas G. Rupp, 2011. "Is There a 'Hidden Cost of Control' in Naturally-Occurring Markets? Evidence from a Natural Field Experiment," NBER Working Papers 17472, National Bureau of Economic Research, Inc.
  11. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 97(4), pages 543-69, November.
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