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Gift Exchange within a Firm: Evidence from a Field Experiment

Author

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  • Bellemare, Charles

    (Université Laval)

  • Shearer, Bruce S.

    (Université Laval)

Abstract

We present results from a field experiment testing the gift-exchange hypothesis inside a tree-planting firm paying its workforce incentive contracts. Firm managers told a crew of tree planters they would receive a pay raise for one day as a result of a surplus not attributable to past planting productivity. We compare planter productivity – the number of trees planted per day – on the day the gift was handed out with productivity on previous and subsequent days of planting on the same block, and thus under similar planting conditions. We find direct evidence that the gift had a significant and positive effect on daily planter productivity, controlling for planter-fixed effects, weather conditions and other random daily shocks. Moreover, reciprocity is the strongest when the relationship between planters and the firm is longterm.

Suggested Citation

  • Bellemare, Charles & Shearer, Bruce S., 2007. "Gift Exchange within a Firm: Evidence from a Field Experiment," IZA Discussion Papers 2696, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2696
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    Cited by:

    1. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 207-231, August.
    2. Shchetinin, Oleg, 2009. "Contracting Under Reciprocal Altruism," MPRA Paper 13457, University Library of Munich, Germany.
    3. Ernst Fehr & Martin Brown & Christian Zehnder, 2009. "On Reputation: A Microfoundation of Contract Enforcement and Price Rigidity," Economic Journal, Royal Economic Society, vol. 119(536), pages 333-353, March.
    4. Uschi Backes-Gellner & Donata Bessey & Kerstin Pull & Simone Tuor, 2008. "What Behavioural Economics Teaches Personnel Economics," Working Papers 0077, University of Zurich, Institute for Strategy and Business Economics (ISU).
    5. List, John A., 2009. "An introduction to field experiments in economics," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 439-442, June.
    6. Sebastian Kube & Michel Andre Marechal & Clemens Puppe, 2012. "The Currency of Reciprocity: Gift Exchange in the Workplace," American Economic Review, American Economic Association, vol. 102(4), pages 1644-1662, June.
    7. Florian Englmaier & Stephen Leider, 2012. "Contractual and Organizational Structure with Reciprocal Agents," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 146-183, May.
    8. Michel André Maréchal & Christian Thöni, 2007. "Do Managers Reciprocate? Field Experimental Evidence From a Competitive Market," University of St. Gallen Department of Economics working paper series 2007 2007-09, Department of Economics, University of St. Gallen.
    9. Ernst Fehr & Thomas Epper & Julien Senn, 2023. "The Fundamental Properties, Stability and Predictive Power of Distributional Preferences," Working Papers 2023-iRisk-07, IESEG School of Management.
    10. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s1), pages 207-231, August.

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    More about this item

    Keywords

    field experiments; reciprocity; gift exchange; incentive contracts;
    All these keywords.

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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