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A theoretical note on asymmetries in intensity and persistence of reciprocity in labour markets

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  • Marco Fongoni

    (Department of Economics, University of Strathclyde)

Abstract

This paper presents a model that can account for, and explain, two well documented empirical asymmetries characterising a worker's reciprocity: negative reciprocity is both stronger, and more persistent, than positive reciprocity. The stronger intensity of negative reciprocity is driven by the worker being loss averse; the longer persistence is driven by the slower adaptation of the worker to wage changes that are perceived as unfair

Suggested Citation

  • Marco Fongoni, 2018. "A theoretical note on asymmetries in intensity and persistence of reciprocity in labour markets," Working Papers 1815, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:1815
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    File URL: https://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/18-15.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dickson, Alex & Fongoni, Marco, 2019. "Asymmetric reference-dependent reciprocity, downward wage rigidity, and the employment contract," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 409-429.

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    More about this item

    Keywords

    reciprocity; loss aversion; adaptation; asymmetries;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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