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Transparency and Reciprocal Behavior in Employment Relations

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Author Info
Irlenbusch, Bernd (University of Erfurt)
Sliwka, Dirk () (University of Bonn and IZA Bonn)

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Abstract

The impact of transparency on the extent of reciprocal behavior is investigated in a simple repeated gift exchange experiment, where principals set wages and agents respond by choosing effort levels. In addition to the efforts the principals’ payoffs are determined by a random component. It is shown that direct reciprocal behavior is much stronger in a more transparent situation where efforts are revealed to the principals. However, there is no significant impact of transparency on average effort as non-transparency leads to a stronger diversity in behavioral patterns such that at the same time the frequency of very low and very large effort levels increases.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 887.

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Length: 29 pages
Date of creation: Oct 2003
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Handle: RePEc:iza:izadps:dp887

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Related research
Keywords: transparency; reciprocity; reputation; gift exchange; inequity aversion;

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Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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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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    Other versions:
  2. Huck, Steffen, 1999. "Responder behavior in ultimatum offer games with incomplete information," Journal of Economic Psychology, Elsevier, vol. 20(2), pages 183-206, April. [Downloadable!] (restricted)
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    Other versions:
  5. Gary Charness & Matthew Rabin, 2003. "Understanding Social Preferences with Simple Tests," General Economics and Teaching 0303002, EconWPA. [Downloadable!]
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    Other versions:
  7. Clark, Kenneth & Sefton, Martin, 2001. "The Sequential Prisoner's Dilemma: Evidence on Reciprocation," Economic Journal, Royal Economic Society, vol. 111(468), pages 51-68, January. [Downloadable!] (restricted)
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    Other versions:
  11. 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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    Other versions:
  13. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July. [Downloadable!] (restricted)
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  14. Abbink, Klaus & Irlenbusch, Bernd & Renner, Elke, 2000. "The moonlighting game: An experimental study on reciprocity and retribution," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 265-277, June. [Downloadable!] (restricted)
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    Other versions:
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Cited by:
(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. Sadreih, A. & Hennig-Schmidt, H. & Rockenbach, B., 2003. "Incomplete and asymmetric surplus information in labor relations," Discussion Paper 121, Tilburg University, Center for Economic Research. [Downloadable!]
  2. Harbring, Christine & Irlenbusch, Bernd, 2009. "Sabotage in Tournaments: Evidence from a Laboratory Experiment," IZA Discussion Papers 4205, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Alexander K. Koch & Albrecht Morgenstern & Philippe Raab, 2009. "Career concerns incentives: An experimental test," Economics Working Papers 2009-01, School of Economics and Management, University of Aarhus. [Downloadable!]
  4. Johann Behrens & Hartmut Kliemt & M. Vittoria Levati & Werner Güth, 2006. "Games that Doctors Play Two-layered agency problems in a medical system," Papers on Strategic Interaction 2006-02, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  5. Reiss, J. Philipp & Wolff, Irenaeus, 2007. "Non-monotonic Repayment Contracts are Superior: An Experimental Approach," Research Memoranda 053, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  6. Heike Hennig-Schmidt & Bettina Rockenbach & Abdolkarim Sadrieh, 2003. "Incomplete and Asymmetric Surplus Information in Labor Relations," Bonn Econ Discussion Papers bgse24_2003, University of Bonn, Germany. [Downloadable!]
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