Timing of Kindness - Evidence from a Field Experiment

21 Pages Posted: 23 Jul 2014

See all articles by Axel Ockenfels

Axel Ockenfels

University of Cologne - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Dirk Sliwka

University of Cologne - Department of Business Administration and Human Resource Management; IZA Institute of Labor Economics

Peter Werner

Maastricht University - Department of Economics

Date Written: July 23, 2014

Abstract

We conduct a field experiment in a naturally occurring labor environment and track whether the performance of workers responds to unexpected wage increases. Specifically, we investigate how the timing of wage increases affects efforts. We find that workers’ performance is about 11% higher for the same total wage when their wage is increased in two steps as opposed to a single increase at the outset. Moreover, workers are more honest and are more willing to do voluntary extra work after surprising wage increases compared to a baseline condition without increases.

Keywords: gift exchange, positive reciprocity, field experiment, honesty

JEL Classification: C930, D640, J330, M520

Suggested Citation

Ockenfels, Axel and Sliwka, Dirk and Werner, Peter, Timing of Kindness - Evidence from a Field Experiment (July 23, 2014). CESifo Working Paper Series No. 4885. Available at SSRN: https://ssrn.com/abstract=2470358

Axel Ockenfels

University of Cologne - Department of Economics ( email )

Albertus Magnus Platz
Cologne 50923
Germany

HOME PAGE: http://ockenfels.uni-koeln.de/

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Dirk Sliwka

University of Cologne - Department of Business Administration and Human Resource Management ( email )

Koln, 50923
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Peter Werner (Contact Author)

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

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