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Wages and Reciprocity in the Workplace

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  • Abigail Barr
  • Pieter Serneels

Abstract

We explore the role of reciprocity in wage determination by combining experimental and survey data. The experiment is similar to Berg, Dickhaut and McCabe`s (1995) and is conducted with Ghanaian manufacturing workers. The survey relates to the same sample workers and the firms within which they are employed. We find a strong positive association between individual reciprocity and individual wages. However, the direction of causality is unclear. Various aspects of the distribution of the tendency to reciprocate within an employee`s workforce are also associated with that employee`s wage and, in this case, there are strong arguments for a causal link is from former to latter. In particular, the mean, median, and minimum levels of reciprocity have a positive effect on wages, while the spread in the distribution (standard deviation) has a strong significant negative effect. This suggests that homogenous behaviour, or convergence to a norm, is rewarded. The results underline the importance of behavioural characteristics and firm culture for the operation of the labour market.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2004-18.

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Date of creation: 01 Jul 2004
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Handle: RePEc:oxf:wpaper:wps/2004-18

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Keywords: wages; reciprocity; field experiment;

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References

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Citations

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Cited by:
  1. Matthias Benz & Stephan Meier, 2008. "Do people behave in experiments as in the field?—evidence from donations," Experimental Economics, Springer, vol. 11(3), pages 268-281, September.
  2. Jeffrey Carpenter & Erika Seki, 2005. "Do Social PreferencesIncrease Productivity? Field experimental evidence from fishermen in Toyoma Bay," Middlebury College Working Paper Series 0515, Middlebury College, Department of Economics.
  3. Abigail Barr, 2004. "Rational and Biased Trust," CSAE Working Paper Series 2004-22, Centre for the Study of African Economies, University of Oxford.
  4. Levitt, Steven D. & List, John A., 2009. "Field experiments in economics: The past, the present, and the future," European Economic Review, Elsevier, vol. 53(1), pages 1-18, January.
  5. Andreoni,J., 2005. "Trust, reciprocity, and contract enforcement : experiments on satisfaction guaranteed," Working papers 7, Wisconsin Madison - Social Systems.
  6. Jack, B. Kelsey, 2009. "Upstream-downstream transactions and watershed externalities: Experimental evidence from Kenya," Ecological Economics, Elsevier, vol. 68(6), pages 1813-1824, April.

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