IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace

  • Brandes, Leif
  • Franck, Egon

This paper provides non-experimental field evidence on positive and negative worker reciprocity. We analyze the performance reactions of professional workers to fair and unfair wage allocations in their natural environment. The objects of interest are professional soccer players in the German Bundesliga. This environment enables us to circumvent the main problems of observational studies on reciprocity because there is substantial transparency in individual player values and performance. Our main finding is that workers exhibit both positive and negative reciprocity toward employers who deviate from a player’s perception of a fair market wage. This perception of a fair wage follows from a Mincer-type wage equation that incorporates a worker’s past performance. The different results between changing and non-changing players are in line with theories of fairness perception but cannot be explained by private information from the employers or the personal career concerns of the players. Altogether, our findings provide strong evidence for the external validity of previous laboratory results on gift exchange in the labor market.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0167487012000529
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 33 (2012)
Issue (Month): 5 ()
Pages: 925-939

as
in new window

Handle: RePEc:eee:joepsy:v:33:y:2012:i:5:p:925-939
Contact details of provider: Web page: http://www.elsevier.com/locate/joep

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.:

as in new window
  1. Heike Hennig-Schmidt & Bettina Rockenbach & Abdolkarim Sadrieh, 2010. "In Search Of Workers' Real Effort Reciprocity-A Field and a Laboratory Experiment," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 817-837, 06.
  2. Egon Franck & Stephan Nüesch, 2007. "Talent and/or Popularity - What Does it Take to Be a Superstar," Working Papers 0074, University of Zurich, Institute for Strategy and Business Economics (ISU).
  3. Armin Falk & Ernst Fehr & Urs Fischbacher, . "Testing Theories of Fairness - Intentions Matter," IEW - Working Papers 063, Institute for Empirical Research in Economics - University of Zurich.
  4. John List, 2006. "The behavioralist meets the market: Measuring social preferences and reputation effects in actual transactions," Natural Field Experiments 00300, The Field Experiments Website.
  5. Uri Gneezy & John A List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," Econometrica, Econometric Society, vol. 74(5), pages 1365-1384, 09.
  6. Kirchler, Erich & Fehr, Ernst & Evans, Robert, 1996. "Social exchange in the labor market: Reciprocity and trust versus egoistic money maximization," Journal of Economic Psychology, Elsevier, vol. 17(3), pages 313-341, June.
  7. Gary E. Bolton & Jordi Brandts & Axel Ockenfels, 2000. "Fair Procedures. Evidence from Games Involving Lotteries," UFAE and IAE Working Papers 483.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  8. Omar Al-Ubaydli & Uri Gneezy & Min Sok Lee & John A. List, 2010. "Towards an understanding of the relative strengths of positive and negative reciprocity," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(7), pages 524-539, December.
  9. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages S285-300, October.
  10. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May.
  11. Sebastian Kube & Michel André Maréchal & Clemens Puppe, 2010. "The currency of reciprocity - gift-exchange in the workplace," IEW - Working Papers 377, Institute for Empirical Research in Economics - University of Zurich, revised Aug 2011.
  12. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  13. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
  14. Darin Lee & Nicholas G. Rupp, 2007. "Retracting a Gift: How Does Employee Effort Respond to Wage Reductions?," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 725-761.
  15. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  16. Dufwenberg, M. & Kirchsteiger, G., 1998. "A Theory of Sequential Reciprocity," Discussion Paper 1998-37, Tilburg University, Center for Economic Research.
  17. Alan B. Krueger & Alexandre Mas, 2004. "Strikes, Scabs, and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 253-289, April.
  18. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2001. "On the Nature of Fair Behaviour," CEPR Discussion Papers 2984, C.E.P.R. Discussion Papers.
  19. Houser, Daniel & Morton, Rebecca & Stratmann, Thomas, 2011. "Turned on or turned out? Campaign advertising, information and voting," European Journal of Political Economy, Elsevier, vol. 27(4), pages 708-727.
  20. Benno Torgler & Sascha Schmidt, 2005. "What Shapes Players? Performance in Soccer? Empirical Findings from a Panel Analysis," CREMA Working Paper Series 2005-25, Center for Research in Economics, Management and the Arts (CREMA), revised Jan 2006.
  21. Alexandre Mas, 2006. "Pay, Reference Points, and Police Performance," NBER Working Papers 12202, National Bureau of Economic Research, Inc.
  22. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May.
  23. Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
  24. Irlenbusch, Bernd & Sliwka, Dirk, 2003. "Career Concerns in a Simple Experimental Labour Market," IZA Discussion Papers 855, Institute for the Study of Labor (IZA).
  25. Michal Krawczyk, 2011. "A model of procedural and distributive fairness," Theory and Decision, Springer, vol. 70(1), pages 111-128, January.
  26. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, December.
  27. Gary Charness & Guillaume R. Frechette & John H. Kagel, 2004. "How Robust is Laboratory Gift Exchange?," Experimental Economics, Springer, vol. 7(2), pages 189-205, 06.
  28. Bernd Frick, 2007. "The Football Players' Labor Market: Empirical Evidence From The Major European Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 422-446, 07.
  29. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  30. Offerman, Theo, 2002. "Hurting hurts more than helping helps," European Economic Review, Elsevier, vol. 46(8), pages 1423-1437, September.
  31. Cox, James C. & Friedman, Daniel & Gjerstad, Steven, 2007. "A tractable model of reciprocity and fairness," Games and Economic Behavior, Elsevier, vol. 59(1), pages 17-45, April.
  32. Summers, Lawrence H, 1988. "Relative Wages, Efficiency Wages, and Keynesian Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 383-88, May.
  33. Al-Ubaydli, Omar & Lee, Min Sok, 2009. "An experimental study of asymmetric reciprocity," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 738-749, November.
  34. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  35. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  36. Bellemare, Charles & Shearer, Bruce, 2009. "Gift giving and worker productivity: Evidence from a firm-level experiment," Games and Economic Behavior, Elsevier, vol. 67(1), pages 233-244, September.
  37. Falk, Armin & Heckman, James J., 2009. "Lab Experiments Are a Major Source of Knowledge in the Social Sciences," IZA Discussion Papers 4540, Institute for the Study of Labor (IZA).
  38. Gary Charness, 2004. "Attribution and Reciprocity in an Experimental Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 665-688, July.
  39. Henry S. Farber, 2008. "Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers," American Economic Review, American Economic Association, vol. 98(3), pages 1069-82, June.
  40. Bartling, Björn & von Siemens, Ferdinand A., 2011. "Wage inequality and team production: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 1-16, February.
  41. Benno Torgler & Markus Schaffner & Bruno S. Frey & Sascha L. Schmidt, 2008. "Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field," IEW - Working Papers 369, Institute for Empirical Research in Economics - University of Zurich.
  42. Ben Greiner & Axel Ockenfels & Peter Werner, 2010. "Wage Transparency and Performance: A Real-Effort Experiment," Working Paper Series in Economics 48, University of Cologne, Department of Economics.
  43. Markus Kern & Bernd Süssmuth, 2005. "Managerial Efficiency in German Top League Soccer: An Econometric Analysis of Club Performances On and Off the Pitch," German Economic Review, Verein für Socialpolitik, vol. 6(4), pages 485-506, November.
  44. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  45. Trautmann, Stefan T., 2009. "A tractable model of process fairness under risk," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 803-813, October.
  46. Camerer, Colin & Babcock, Linda & Loewenstein, George & Thaler, Richard, 1996. "Labor Supply of New York City Cab Drivers: One Day At A time," Working Papers 960, California Institute of Technology, Division of the Humanities and Social Sciences.
  47. Pereira, Paulo T. & Silva, Nuno & Silva, Joao Andrade e, 2006. "Positive and negative reciprocity in the labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 59(3), pages 406-422, March.
  48. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  49. Henry S. Farber, 2005. "Is Tomorrow Another Day? The Labor Supply of New York City Cabdrivers," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 46-82, February.
  50. Egon Franck & Stephan Nuesch, 2011. "The effect of wage dispersion on team outcome and the way team outcome is produced," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3037-3049.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:33:y:2012:i:5:p:925-939. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.