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

November 5, 2014

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

Abstract:     
Do higher wages elicit reciprocity and lead to increased 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 (in a context with no future employment opportunities). However, structuring a portion of the wage as a clear and unexpected gift — by offering a raise (with no additional conditions) after the employee has accepted the contract ― does lead to higher productivity for the duration of the job. Targeted gifts are more efficient than hiring more workers. However, the mechanism underlying our effect makes this unlikely to explain persistent above-market wages.

Number of Pages in PDF File: 27

working papers series





Download This Paper

Date posted: September 27, 2013 ; Last revised: November 8, 2014

Suggested Citation

Gilchrist, Duncan S. and Luca, Michael and Malhotra, Deepak K., When 3+1 > 4: Gift Structure and Reciprocity in the Field (November 5, 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
Feedback to SSRN


Paper statistics
Abstract Views: 523
Downloads: 130
Download Rank: 132,822
People who downloaded this paper also downloaded:
1. Managers and Market Capitalism
By Rebecca Henderson and Karthik Ramanna

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.250 seconds