Social Preferences or Personal Career Concerns? Field Evidence on Positive and Negative Reciprocity in the Workplace

47 Pages Posted: 30 Oct 2010 Last revised: 22 May 2012

See all articles by Leif Brandes

Leif Brandes

University of Lucerne

Egon P. Franck

University of Zurich - Department of Business Administration (IBW)

Date Written: May 21, 2012

Abstract

This paper provides non-experimental field evidence on positive and negative worker reciprocity. We analyze the performance reactions of professional workers to fair and unfair wage allocations in their natural environment. The objects of interest are professional soccer players in the German Bundesliga. This environment enables us to circumvent the main problems of observational studies on reciprocity because there is substantial transparency in individual player values and performance. Our main finding is that workers exhibit both positive and negative reciprocity toward employers who deviate from a player’s perception of a fair market wage. This perception of a fair wage follows from a Mincer-type wage equation that incorporates a worker’s past performance. The different results between changing and non-changing players are in line with theories of fairness perception but cannot be explained by private information from the employers or the personal career concerns of the players. Altogether, our findings provide strong evidence for the external validity of previous laboratory results on gift exchange in the labor market.

Keywords: Reciprocity, Fairness, Gift-Exchange, Job Changes

JEL Classification: D84, J30

Suggested Citation

Brandes, Leif and Franck, Egon P., Social Preferences or Personal Career Concerns? Field Evidence on Positive and Negative Reciprocity in the Workplace (May 21, 2012). Journal of Economic Psychology, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1698737 or http://dx.doi.org/10.2139/ssrn.1698737

Leif Brandes (Contact Author)

University of Lucerne ( email )

Lucerne
Switzerland

Egon P. Franck

University of Zurich - Department of Business Administration (IBW) ( email )

Plattenstrasse 14
Zurich 8032
Switzerland
+41 1 634 28 45 (Phone)

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