28 Pages Posted: 27 Sep 2013 Last revised: 9 Apr 2015
Date Written: April 7, 2015
Do higher wages elicit reciprocity and lead to increased productivity? In a field experiment with 266 employees, we find that paying higher wages, per se, does not have a discernible effect on productivity (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. Gifts are roughly as efficient as hiring more workers.
Suggested Citation: Suggested Citation
Gilchrist, Duncan S. and Luca, Michael and Malhotra, Deepak K., When 3 + 1 > 4: Gift Structure and Reciprocity in the Field (April 7, 2015). Harvard Business School NOM Unit Working Paper No. 14-030. Available at SSRN: https://ssrn.com/abstract=2331487 or http://dx.doi.org/10.2139/ssrn.2331487