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Putting reciprocity to work - positive versus negative responses in the field

Listed author(s):
  • Puppe Clemens
  • Sebastian Kube
  • Michel Marechal

We study the role of reciprocity in a labor market field experiment. In a recent paper, Gneezy and List (2006) investigate the impact of gift exchange in this context and find that it has only a transient effect on long run outcomes. Extending their work to examine both positive and negative reciprocity, we find consonant evidence in the positive reciprocity condition: the gift does not work well in the long run (if at all). Yet, in the negative reciprocity treatment we observe much stronger effects: a wage reduction has a significant and lasting negative impact on efforts. Together, these results highlight the asymmetry of positive and negative reciprocity that exists in the field, and provide an indication of the relative importance of each in the long run.

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Paper provided by The Field Experiments Website in its series Natural Field Experiments with number 00291.

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Date of creation: 2006
Handle: RePEc:feb:natura:00291
Contact details of provider: Web page: http://www.fieldexperiments.com

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  1. Agell, Jonas & Bennmarker, Helge, 2003. "Endogenous Wage Rigidity," Research Papers in Economics 2003:10, Stockholm University, Department of Economics.
  2. Glenn Harrison & John List, 2004. "Field experiments," Artefactual Field Experiments 00058, The Field Experiments Website.
  3. Heike Hennig-Schmidt & Bettina Rockenbach & Abdolkarim Sadrieh, 2005. "In search of worker's real effort reciprocity - a field and a laboratory experiment," Artefactual Field Experiments 00065, The Field Experiments Website.
  4. James Cox & Daniel Friedman & Steven Gjerstad, 2004. "A Tractable Model of Reciprocity and Fairness," Experimental 0406001, EconWPA.
  5. John A. List, 2006. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 1-37, February.
  6. Margin Dufwenberg & Georg Kirchsteiger, 2001. "A Theory of Sequential Reciprocity," Levine's Working Paper Archive 563824000000000090, David K. Levine.
  7. Georg Kirchsteiger & Ernst Fehr & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," ULB Institutional Repository 2013/5927, ULB -- Universite Libre de Bruxelles.
  8. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
  9. 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.
  10. Armin Falk & Urs Fischbacher, 2001. "A Theory of Reciprocity," CESifo Working Paper Series 457, CESifo Group Munich.
  11. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
  12. Matthew Rabin., 1992. "Incorporating Fairness into Game Theory and Economics," Economics Working Papers 92-199, University of California at Berkeley.
  13. Carl M. Campbell III & Kunal S. Kamlani, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 759-789.
  14. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  15. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
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