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Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence


  • Jordi Brandts
  • Gary Charness


We study how two dimensions of market conditions affect behaviour in experimental gift-exchange markets with repeated interaction. First, we consider the impact of competitive imbalance, by varying whether there is an excess supply of "firms" or an excess supply of "workers" in the market. Second, we impose a minimum wage in the market with an excess supply of workers, and study the overall effect on wages and productivity. Perhaps surprisingly, the state of competition does not appear to have strong effects in our data; however, there is some evidence of lower productivity when a minimum wage is imposed. Copyright 2004 Royal Economic Society.

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  • Jordi Brandts & Gary Charness, 2004. "Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence," Economic Journal, Royal Economic Society, vol. 114(497), pages 684-708, July.
  • Handle: RePEc:ecj:econjl:v:114:y:2004:i:497:p:684-708

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    References listed on IDEAS

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