Reciprocal preferences and the unraveling of gift-exchange
AbstractWe elicit reciprocal preferences in a firm-worker gift-exchange setting and relate them to actual behavior in a repeated gift-exchange game. We find that only a small minority of 10 percent of workers is materially selfish whereas 90 percent exhibit reciprocal preferences. However, the intensity of reciprocal preferences is weak in the sense that firms maximize profits by not relying on gift-exchange but by offering the lowest possible wage. Workers behavior in the repeated gift-exchange game is predicted by their elicited preferences, but the correlation between preferences and behavior is imperfect. Together with profit maximizing behavior of firms these observations can explain the observed unraveling of gift-exchange over time in our experiment and some recent field experiments.
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Bibliographic InfoPaper provided by Maastricht University, Graduate School of Business and Economics (GSBE) in its series Research Memorandum with number 034.
Date of creation: 2013
Date of revision:
Noncooperative Games; Design of Experiments: Laboratory; Group Behavior; Labor-Management Relations; Trade Unions; and Collective Bargaining: Other;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- J59 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-02 (All new papers)
- NEP-EVO-2014-02-02 (Evolutionary Economics)
- NEP-EXP-2014-02-02 (Experimental Economics)
- NEP-GTH-2014-02-02 (Game Theory)
- NEP-HRM-2014-02-02 (Human Capital & Human Resource Management)
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