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Monetary and Non-monetary Gift Exchange

  • Saima Mahmood

    (Pakistan Institute of Development Economics, Islamabad
    Sate Bank of Pakistan)

  • Asad Zaman

    (International Islamic University, Islamabad)

We study the role of reciprocity in a labour market field experiment. Recently, many experiments have been conducted to test the extent to which cash and non-monetary gifts affect workers’ productivity through social exchange. Our experiment concluded that non-monetary gifts are more effective at invoking reciprocal behaviour. Despite a higher preference for money, a non-monetary incentive results in a significant increase in productivity as compared to an equivalent cash gift. Extending the experiment for negative reciprocity, the results highlight the asymmetry of positive and negative reciprocity that exists in the field. Discontinuation of a monetary gift results in a stronger negative effect than the discontinuation of non-monetary gifts

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File URL: http://www.pide.org.pk/pdf/PDR/2010/Volume4/719-740.pdf
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Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 49 (2010)
Issue (Month): 4 ()
Pages: 719–740

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Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:719-740
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