Abstract

http://ssrn.com/abstract=2331487
 


 



When 3 + 1 > 4: Gift Structure and Reciprocity in the Field


Duncan S. Gilchrist


Harvard University - Department of Economics; Harvard Business School

Michael Luca


Harvard Business School - Negotiations, Organizations & Markets Unit

Deepak K. Malhotra


Harvard Business School - Negotiation, Organizations & Markets Unit

June 24, 2014

Harvard Business School NOM Unit Working Paper No. 14-030

Abstract:     
Do higher wages elicit reciprocity and hence higher productivity? In a field experiment with 266 employees, we find that paying above-market wages, per se, does not have an effect on productivity relative to paying market wages. However, structuring a portion of the wage as a clear and unexpected gift (by offering a raise with no further conditions after the employee has accepted the contract – with no future employment) does lead to higher productivity for the duration of the job. Targeted gifts are more efficient than hiring more workers. However, the mechanism makes this unlikely to explain persistent above-market wages.

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Date posted: September 27, 2013 ; Last revised: June 25, 2014

Suggested Citation

Gilchrist, Duncan S. and Luca, Michael and Malhotra, Deepak K., When 3 + 1 > 4: Gift Structure and Reciprocity in the Field (June 24, 2014). Harvard Business School NOM Unit Working Paper No. 14-030. Available at SSRN: http://ssrn.com/abstract=2331487 or http://dx.doi.org/10.2139/ssrn.2331487

Contact Information

Duncan S. Gilchrist
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
Harvard Business School ( email )
Soldiers Field Road
Boston, MA 02163
United States
Michael Luca (Contact Author)
Harvard Business School - Negotiations, Organizations & Markets Unit ( email )
Soldiers Field Road
Boston, MA 02163
United States
HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=ovr&facId=602417
Deepak K. Malhotra
Harvard Business School - Negotiation, Organizations & Markets Unit ( email )
Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
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