Fairness and Learning in Multi-Employee Gift-Exchange Games: An Experimental Analysis

19 Pages Posted: 5 Nov 2011 Last revised: 22 Jan 2015

Volker Benndorf

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE)

Holger Andreas Rau

University of Göttingen

Date Written: January 21, 2015

Abstract

We study the role of norm violations and learning behavior in multi- and single-worker gift-exchange games and find that working with co-workers leads to a twofold effect. First, flexible wages yield moderately higher efforts than in the single-employee treatment. The data suggests that this is caused by learning behavior of workers who realize that higher effort pays off and exert more effort than in the single worker case. Second, when wage discrimination is not possible, effort is crowded-out and is substantially smaller than in the single-employee treatment.

Keywords: Learning Behavior, Gift Exchange, Multi-Employees, Reciprocity

JEL Classification: C91, C92, J41

Suggested Citation

Benndorf, Volker and Rau, Holger Andreas, Fairness and Learning in Multi-Employee Gift-Exchange Games: An Experimental Analysis (January 21, 2015). Available at SSRN: https://ssrn.com/abstract=1955164 or http://dx.doi.org/10.2139/ssrn.1955164

Volker Benndorf (Contact Author)

Heinrich Heine University Dusseldorf - Duesseldorf Institute for Competition Economics (DICE) ( email )

Universitaetsstr. 1
Duesseldorf, NRW 40225
Germany

Holger Andreas Rau

University of Göttingen ( email )

Platz der Göttinger Sieben 3
Göttingen, Niedersachsen 37073
Germany

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