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Estimating Social Preferences and Gift Exchange at Work

Author

Listed:
  • Gautam Rao
  • Stefano DellaVigna
  • John List
  • Ulrike Malmendier

Abstract

We design a model-based field experiment to estimate the nature and magnitude of workers' social references towards their employers. We hire 446 workers for a one-time task. Within worker, we vary (i) piece rates; (ii) whether the work has payoffs only for the worker, or also for the employer; and (iii) the return to the employer. We then introduce a surprise increase or decrease in pay (`gifts') from the employer. We find that workers have substantial baseline social preferences towards their employers, even in the absence of repeated-game incentives. Consistent with models of warm glow or social norms, but not of pure altruism, workers exert substantially more effort when their work is consequential to their employer, but are insensitive to the precise return to the employer. Turning to reciprocity, we find little evidence of a response to unexpected positive (or negative) gifts from the employer. Our structural estimates of the social preferences suggest that, if anything, positive reciprocity in response to monetary `gifts' may be larger than negative reciprocity. We revisit the results of previous field experiments on gift exchange using our model and derive a one-parameter expression for the implied reciprocity in these experiments.

Suggested Citation

  • Gautam Rao & Stefano DellaVigna & John List & Ulrike Malmendier, 2016. "Estimating Social Preferences and Gift Exchange at Work," Working Paper 396911, Harvard University OpenScholar.
  • Handle: RePEc:qsh:wpaper:396911
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    File URL: http://scholar.harvard.edu/rao/node/396911
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    References listed on IDEAS

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    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
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    Citations

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    Cited by:

    1. Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2018. "The Skills to Pay the Bills: Returns to On-the-job Soft Skills Training," NBER Working Papers 24313, National Bureau of Economic Research, Inc.
    2. Heinz, Matthias & Jeworrek, Sabrina & Mertins, Vanessa & Schumacher, Heiner & Sutter, Matthias, 2017. "Measuring Indirect Effects of Unfair Employer Behavior on Worker Productivity - A Field Experiment," CEPR Discussion Papers 12429, C.E.P.R. Discussion Papers.
    3. Davies, Elwyn & Fafchamps, Marcel, 2017. "Pledging, Praising and Shaming: Experimental Labour Markets in Ghana," IZA Discussion Papers 10520, Institute of Labor Economics (IZA).
    4. Marco Faillo & Luigi Mittone & Costanza Piovanelli, 2018. "Cash posters in the lab," CEEL Working Papers 1801, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    5. repec:oup:qjecon:v:133:y:2018:i:2:p:611-663. is not listed on IDEAS
    6. Carpenter, Jeffrey P., 2018. "The Shape of Warm Glow: Field Experimental Evidence from a Fundraiser," IZA Discussion Papers 11760, Institute of Labor Economics (IZA).
    7. Charness, Gary & Cobo-Reyes, Ramón & Sánchez, Ángela, 2016. "The effect of charitable giving on workers’ performance: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 61-74.
    8. Robert Hahn & Robert D. Metcalfe & David Novgorodsky & Michael K. Price, 2016. "The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets," Experimental Economics Center Working Paper Series 2016-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    9. Eszter Czibor & David Jimenez-Gomez & John List, 2019. "The Dozen Things Experimental Economists Should Do (More of)," Artefactual Field Experiments 00648, The Field Experiments Website.
    10. Michel André Maréchal & Christian Thöni, 2016. "Hidden persuaders: do small gifts lubricate business negotiations?," ECON - Working Papers 227, Department of Economics - University of Zurich, revised May 2018.
    11. Breitmoser, Yves & Vorjohann, Pauline, 2018. "Welfare-Based Altruism," Rationality and Competition Discussion Paper Series 89, CRC TRR 190 Rationality and Competition.
    12. Cardella, Eric & Depew, Briggs, 2016. "Testing for the Ratchet Effect: Evidence from a Real-Effort Work Task," IZA Discussion Papers 9981, Institute of Labor Economics (IZA).
    13. Emily Breza & Supreet Kaur & Yogita Shamdasani, 2018. "The Morale Effects of Pay Inequality," The Quarterly Journal of Economics, Oxford University Press, vol. 133(2), pages 611-663.
    14. repec:eee:eecrev:v:101:y:2018:i:c:p:528-545 is not listed on IDEAS
    15. Sandvik, Jason & Saouma, Richard & Seegert, Nathan & Stanton, Christopher T., 2018. "Analyzing the Aftermath of a Compensation Reduction," CEPR Discussion Papers 13242, C.E.P.R. Discussion Papers.
    16. repec:eee:gamebe:v:107:y:2018:i:c:p:182-202 is not listed on IDEAS

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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