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Managerial Payoff and Gift Exchange in the Field

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  • Florian Englmaier
  • Stephen G. Leider

Abstract

We conduct a field experiment where we vary both the presence of a gift exchange wage and the effect of the worker’s effort on the manager’s payoff. The results indicate a strong complementarity between the initial wage gift and the agent’s ability to “repay the gift”. We collect information on ability to control for differences and on reciprocal inclination to show that gift exchange is more effective with more reciprocal agents. We present a simple principal-agent model with reciprocal subjects that motivates our empirical findings. Our results offer an avenue to reconcile the recent conflicting evidence on the efficacy of gift exchange outside the lab; we suggest that the significance of gift exchange relations depends on details of the environment.

Suggested Citation

  • Florian Englmaier & Stephen G. Leider, 2012. "Managerial Payoff and Gift Exchange in the Field," CESifo Working Paper Series 3707, CESifo.
    • Handle: RePEc:ces:ceswps:_3707
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    Cited by:

    1. Kandul, Serhiy & Lanz, Bruno & Reins, Evert, 2023. "Reciprocity and gift exchange in markets for credence goods," Games and Economic Behavior, Elsevier, vol. 141(C), pages 52-69.
    2. Gosnell, Greer & Metcalfe, Robert & List, John A, 2016. "A new approach to an age-old problem: solving externalities by incenting workers directly," LSE Research Online Documents on Economics 84331, London School of Economics and Political Science, LSE Library.
    3. Carpenter, Jeffrey, 2016. "The labor supply of fixed-wage workers: Estimates from a real effort experiment," European Economic Review, Elsevier, vol. 89(C), pages 85-95.
    4. Caterina Giannetti & Raimondello Orsini, 2014. "Being nice with the experimenter?," Applied Economics Letters, Taylor & Francis Journals, vol. 21(12), pages 857-861, August.
    5. Ockenfels, Axel & Sliwka, Dirk & Werner, Peter, 2015. "Timing of kindness – Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 79-87.
    6. Maria Micevski, 2013. "Reciprocity, Matching, and Wage Competition," Working Paper Series of the Department of Economics, University of Konstanz 2013-25, Department of Economics, University of Konstanz.
    7. Florian Englmaier & Stephen Leider, 2012. "Contractual and Organizational Structure with Reciprocal Agents," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 146-183, May.
    8. Bogliacino, Francesco & Grimalda, Gianluca & Pipke, David, 2021. "Kind or contented? An investigation of the gift exchange hypothesis in a natural field experiment in Colombia," OSF Preprints xmjaq, Center for Open Science.
    9. Englmaier, Florian & Schüßler, Katharina, 2015. "Complementarities of HRM Practices," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 503, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    10. Cao, Cangjian & Li, Sherry Xin & Liu, Tracy Xiao, 2020. "A gift with thoughtfulness: A field experiment on work incentives," Games and Economic Behavior, Elsevier, vol. 124(C), pages 17-42.
    11. Florian Englmaier & Katharina Schüßler, 2015. "Complementarities of HRM Practices - A Case for Employing Multiple Methods and Integrating Multiple Fields," CESifo Working Paper Series 5249, CESifo.
    12. Bejarano, Hernán & Corgnet, Brice & Gómez-Miñambres, Joaquín, 2021. "Economic stability promotes gift-exchange in the workplace," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 374-398.
    13. Sauermann, Jan, 2015. "Worker Reciprocity and the Returns to Training: Evidence from a Field Experiment," IZA Discussion Papers 9179, Institute of Labor Economics (IZA).
    14. Duncan S. Gilchrist & Michael Luca & Deepak Malhotra, 2016. "When 3 + 1 > 4: Gift Structure and Reciprocity in the Field," Management Science, INFORMS, vol. 62(9), pages 2639-2650, September.
    15. Sascha O. Becker & Dolores Messer & Stefan C. Wolter, 2013. "A Gift is Not Always a Gift: Heterogeneity and Long-term Effects in a Gift Exchange Experiment," Economica, London School of Economics and Political Science, vol. 80(318), pages 345-371, April.
    16. Zheng, Kaiming & Wang, Xiaoyuan & Ni, Debing, 2021. "Reciprocity information and wage personalization," China Economic Review, Elsevier, vol. 68(C).
    17. Judd Kessler & Judd B. Kessler, 2013. "When will there be Gift Exchange? Addressing the Lab-Field Debate with Laboratory Gift Exchange Experiments," CESifo Working Paper Series 4161, CESifo.

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    More about this item

    Keywords

    incentives; reciprocity; gift exchange; field experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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