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Transparency and Reciprocal Behavior

  • Irlenbusch, Bernd

    ()

    (University of Cologne)

  • Sliwka, Dirk

    ()

    (University of Cologne)

The impact of transparency on the extent of reciprocal behavior is investigated in a simple repeated gift exchange experiment, where principals set wages and agents respond by choosing effort levels. In addition to the efforts the principals’ payoffs are determined by a random component. It is shown that direct reciprocal behavior is much stronger in a more transparent situation where efforts are revealed to the principals. However, there is no significant impact of transparency on average effort as non-transparency leads to a stronger diversity in behavioral patterns such that at the same time the frequency of very low and very large effort levels increases.

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File URL: http://ftp.iza.org/dp887.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 887.

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Length: 29 pages
Date of creation: Oct 2003
Date of revision:
Publication status: published in: Journal of Economic Behavior and Organization, 2005, 56 (3), 383-403
Handle: RePEc:iza:izadps:dp887
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