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Transparency and Reciprocal Behavior

Author

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  • Irlenbusch, Bernd

    () (University of Cologne)

  • Sliwka, Dirk

    () (University of Cologne)

Abstract

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.

Suggested Citation

  • Irlenbusch, Bernd & Sliwka, Dirk, 2003. "Transparency and Reciprocal Behavior," IZA Discussion Papers 887, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp887
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    References listed on IDEAS

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    Cited by:

    1. Hennig-Schmidt, H. & Rockenbach, B. & Sadrieh, A., 2003. "Incomplete and Asymmetric Surplus Information in Labor Relations," Discussion Paper 2003-121, Tilburg University, Center for Economic Research.
    2. Marchegiani, Lucia & Reggiani, Tommaso G. & Rizzolli, Matteo, 2011. "How Unjust! An Experimental Investigation of Supervisors' Evaluation Errors and Agents' Incentives," IZA Discussion Papers 6254, Institute for the Study of Labor (IZA).
    3. Florian Englmaier & Stephen G. Leider, 2010. "Gift Exchange in the Lab - It is not (only) how much you give ..," CESifo Working Paper Series 2944, CESifo Group Munich.

    More about this item

    Keywords

    inequity aversion; gift exchange; reputation; reciprocity; transparency;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • 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

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