IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6410.html
   My bibliography  Save this paper

The Multi-Dimensional Effects of Reciprocity on Worker Effort: Evidence from a Hybrid Field-Laboratory Labor Market Experiment

Author

Listed:
  • Kim, Min-Taec

    (University of Sydney)

  • Slonim, Robert

    (University of Sydney)

Abstract

We examine the gift exchange hypothesis on both the quantity and quality of output using a hybrid field-laboratory labor market experiment. We recruited participants to enter survey data for a well-known charitable organization. Workers were paid either a high or low wage. We find that although the total number of surveys entered did not vary with the wage, high wage workers made fewer errors and entered more surveys after controlling for errors. We further find that for low costs associated with errors, offering the low wage maximizes profits, but for higher costs paying the higher "gift exchange" wage maximizes profits.

Suggested Citation

  • Kim, Min-Taec & Slonim, Robert, 2012. "The Multi-Dimensional Effects of Reciprocity on Worker Effort: Evidence from a Hybrid Field-Laboratory Labor Market Experiment," IZA Discussion Papers 6410, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6410
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp6410.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(2), pages 437-459.
    2. Alexandre Mas & Enrico Moretti, 2009. "Peers at Work," American Economic Review, American Economic Association, vol. 99(1), pages 112-145, March.
    3. Heike Hennig-Schmidt & Bettina Rockenbach & Abdolkarim Sadrieh, 2010. "In Search Of Workers' Real Effort Reciprocity-A Field and a Laboratory Experiment," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 817-837, June.
    4. 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.
    5. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    6. Michael Kosfeld & Susanne Neckermann, 2011. "Getting More Work for Nothing? Symbolic Awards and Worker Performance," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 86-99, August.
    7. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    8. Alan B. Krueger & Alexandre Mas, 2004. "Strikes, Scabs, and Tread Separations: Labor Strife and the Production of Defective Bridgestone/Firestone Tires," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 253-289, April.
    9. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 543-569.
    10. George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 1125-1156.
    11. Gary Charness & Guillaume R. Frechette & John H. Kagel, 2004. "How Robust is Laboratory Gift Exchange?," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 189-205, June.
    12. John A. List, 2009. "Social Preferences: Some Thoughts from the Field," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 563-583, May.
    13. Slonim, Robert & Garbarino, Ellen, 1999. "The Effect of Price History on Demand as Mediated by Perceived Price Expensiveness," Journal of Business Research, Elsevier, vol. 45(1), pages 1-14, May.
    14. Uri Gneezy & John A List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," Econometrica, Econometric Society, vol. 74(5), pages 1365-1384, September.
    15. Puppe Clemens & Sebastian Kube & Michel Marechal, 2006. "Putting reciprocity to work - positive versus negative responses in the field," Natural Field Experiments 00291, The Field Experiments Website.
    16. 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.
    17. Alexandre Mas, 2006. "Pay, Reference Points, and Police Performance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(3), pages 783-821.
    18. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
    19. Erte Xiao & Daniel Houser, 2005. "Emotion expression in human punishment behavior," Experimental 0504003, University Library of Munich, Germany, revised 18 May 2005.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. You pay peanuts . . .
      by Nicholas Gruen in Club Troppo on 2012-04-06 11:13:46

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fuhai Hong & Tanjim Hossain & John A. List & Migiwa Tanaka, 2018. "Testing The Theory Of Multitasking: Evidence From A Natural Field Experiment In Chinese Factories," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 511-536, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    2. 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.
    3. Brandes, Leif & Franck, Egon, 2012. "Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 925-939.
    4. Constança Esteves-Sorenson, 2018. "Gift Exchange in the Workplace: Addressing the Conflicting Evidence with a Careful Test," Management Science, INFORMS, vol. 64(9), pages 4365-4388, September.
    5. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    6. Sliwka, Dirk & Werner, Peter, 2016. "How Do Agents React to Dynamic Wage Increases? An Experimental Study," IZA Discussion Papers 9855, Institute of Labor Economics (IZA).
    7. Omar Al-Ubaydli & John A. List, 2019. "How natural field experiments have enhanced our understanding of unemployment," Nature Human Behaviour, Nature, vol. 3(1), pages 33-39, January.
    8. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    9. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status," Management Science, INFORMS, vol. 60(1), pages 38-55, January.
    10. Bejarano, Hernán & Corgnet, Brice & Gómez-Miñambres, Joaquín, 2021. "Economic stability promotes gift-exchange in the workplace," Journal of Economic Behavior & Organization, Elsevier, vol. 187(C), pages 374-398.
    11. Klaus M. Schmidt, 2011. "Social Preferences and Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 207-231, August.
    12. Gagnon, Nickolas & Noussair, C., 2016. "Does Reciprocity Persist Over Time?," Research Memorandum 033, Maastricht University, Graduate School of Business and Economics (GSBE).
    13. Dur, Robert & Non, Arjan & Roelfsema, Hein, 2010. "Reciprocity and incentive pay in the workplace," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 676-686, August.
    14. Fahn, Matthias, 2019. "Reciprocity in Dynamic Employment Relationships," Rationality and Competition Discussion Paper Series 198, CRC TRR 190 Rationality and Competition.
    15. 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.
    16. Abeler, Johannes & Altmann, Steffen & Goerg, Sebastian J. & Kube, Sebastian & Wibral, Matthias, 2011. "Equity and Efficiency in Multi-Worker Firms: Insights from Experimental Economics," IZA Discussion Papers 5727, Institute of Labor Economics (IZA).
    17. Marco Kleine & Sebastian Kube, 2015. "Communication and Trust in Principal-Team Relationships: Experimental Evidence," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_06, Max Planck Institute for Research on Collective Goods.
    18. Emily Breza & Supreet Kaur & Yogita Shamdasani, 2018. "The Morale Effects of Pay Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 611-663.
    19. Rebitzer, James B. & Taylor, Lowell J., 2011. "Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 8, pages 701-772, Elsevier.
    20. Sebastian Kube & Michel André Maréchal & Clemens Puppe, 2013. "Do Wage Cuts Damage Work Morale? Evidence From A Natural Field Experiment," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 853-870, August.

    More about this item

    Keywords

    laboratory and field experiments; multi-tasking; reciprocity; gift exchange;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6410. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.