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The co-evolution of reciprocity-based wage offers and effort choices

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  • Schliffke, Philipp

Abstract

I study the evolution of reciprocity in a gift-exchange game. In equilibrium, wage offers induce maximal effort but there is strong inequity in favor of the workers. The result suggests that norm-based efficiency wages may be unstable over time.

Suggested Citation

  • Schliffke, Philipp, 2012. "The co-evolution of reciprocity-based wage offers and effort choices," Economics Letters, Elsevier, vol. 117(1), pages 326-329.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:326-329
    DOI: 10.1016/j.econlet.2012.05.033
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    References listed on IDEAS

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    1. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    2. Christian Korth, 2009. "Reciprocity—An Indirect Evolutionary Analysis," Lecture Notes in Economics and Mathematical Systems, in: Fairness in Bargaining and Markets, chapter 0, pages 35-55, Springer.
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    6. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    7. Herold, Florian & Kuzmics, Christoph, 2009. "Evolutionary stability of discrimination under observability," Games and Economic Behavior, Elsevier, vol. 67(2), pages 542-551, November.
    8. 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.
    9. Ross Cressman, 2003. "Evolutionary Dynamics and Extensive Form Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033054, December.
    10. Werner Güth & Hartmut Kliemt, 1994. "Competition Or Co-Operation: On The Evolutionary Economics Of Trust, Exploitation And Moral Attitudes," Metroeconomica, Wiley Blackwell, vol. 45(2), pages 155-187, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Reciprocity; Gift-exchange; Indirect evolution; Efficiency wages;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • D - Microeconomics
    • J - Labor and Demographic Economics

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