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Monetary and Non-monetary Gift Exchange

Author

Listed:
  • Saima Mahmood

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

  • Asad Zaman

    (International Islamic University, Islamabad)

Abstract

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

Suggested Citation

  • Saima Mahmood & Asad Zaman, 2010. "Monetary and Non-monetary Gift Exchange," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 719-740.
    • Handle: RePEc:pid:journl:v:49:y:2010:i:4:p:719-740
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    File URL: http://www.pide.org.pk/pdf/PDR/2010/Volume4/719-740.pdf
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    References listed on IDEAS

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    1. Hammermann, Andrea & Mohnen, Alwine, 2014. "The pric(z)e of hard work," Journal of Economic Psychology, Elsevier, vol. 43(C), pages 1-15.
    2. Saima Naeem & Asad Zaman, 2013. "For Love or Money? Motivating Workers," Working Papers id:5436, eSocialSciences.

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    More about this item

    Keywords

    Gift Exchange; Non-monetary Perks; Social Exchange; Asymmetry of Reciprocity;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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