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The Multi-Dimensional Effects of Reciprocity on Worker Effort: Evidence from a Hybrid Field-Laboratory Labor Market Experiment

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Author Info

  • Kim, Min-Taec

    (University of Sydney)

  • Slonim, Robert

    ()
    (University of Sydney)

Abstract

We examine the gift exchange hypothesis on both the quantity and quality of output using a hybrid field-laboratory labor market experiment. We recruited participants to enter survey data for a well-known charitable organization. Workers were paid either a high or low wage. We find that although the total number of surveys entered did not vary with the wage, high wage workers made fewer errors and entered more surveys after controlling for errors. We further find that for low costs associated with errors, offering the low wage maximizes profits, but for higher costs paying the higher "gift exchange" wage maximizes profits.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6410.

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Length: 37 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6410

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Keywords: laboratory and field experiments; multi-tasking; reciprocity; gift exchange;

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References

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  1. Slonim, Robert & Garbarino, Ellen, 1999. "The Effect of Price History on Demand as Mediated by Perceived Price Expensiveness," Journal of Business Research, Elsevier, Elsevier, vol. 45(1), pages 1-14, May.
  2. Uri Gneezy & John List, 2006. "Putting behavioral economics to work: Testing for gift exchange in labor markets using field experiments," Natural Field Experiments 00259, The Field Experiments Website.
  3. Alexandre Mas, 2006. "Pay, Reference Points, and Police Performance," NBER Working Papers 12202, National Bureau of Economic Research, Inc.
  4. Hennig-Schmidt, Heike & Rockenbach, Bettina & Sadrieh, Abdolkarim, 2005. "In Search of Workers' Real Effort Reciprocity - A Field and a Laboratory Experiment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 55, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  5. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  6. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(2), pages 437-59, May.
  7. Florian Englmaier & Stephen Leider, 2012. "Contractual and Organizational Structure with Reciprocal Agents," American Economic Journal: Microeconomics, American Economic Association, American Economic Association, vol. 4(2), pages 146-83, May.
  8. Sebastian Kube & Michel André Maréchal & Clemens Puppe, 2006. "Putting Reciprocity to Work - Positive versus Negative Responses in the Field," University of St. Gallen Department of Economics working paper series 2006, Department of Economics, University of St. Gallen 2006-27, Department of Economics, University of St. Gallen.
  9. Gary Charness & Guillaume R. Frechette & John H. Kagel, 2004. "How Robust is Laboratory Gift Exchange?," Experimental Economics, Springer, Springer, vol. 7(2), pages 189-205, 06.
  10. Michael Kosfeld & Susanne Neckermann, 2011. "Getting More Work for Nothing? Symbolic Awards and Worker Performance," American Economic Journal: Microeconomics, American Economic Association, American Economic Association, vol. 3(3), pages 86-99, August.
  11. Florian Englmaier & Stephen G. Leider, 2010. "Gift Exchange in the Lab - It is not (only) how much you give ..," CESifo Working Paper Series 2944, CESifo Group Munich.
  12. Baker, George & Gibbons, Robert & Murphy, Kevin J, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(4), pages 1125-56, November.
  13. John A. List, 2009. "Social Preferences: Some Thoughts from the Field," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 1(1), pages 563-583, 05.
  14. Erte Xiao & Daniel Houser, 2005. "Emotion expression in human punishment behavior," Experimental, EconWPA 0504003, EconWPA, revised 18 May 2005.
  15. 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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  1. You pay peanuts . . .
    by Nicholas Gruen in Club Troppo on 2012-04-06 06:13:46

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