Estimating Social Preferences and Gift Exchange at Work

57 Pages Posted: 1 Mar 2016

See all articles by Stefano DellaVigna

Stefano DellaVigna

University of California, Berkeley; National Bureau of Economic Research (NBER)

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Ulrike Malmendier

University of California, Berkeley - Department of Economics; University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

Gautam Rao

Harvard University - Department of Economics

Date Written: February 2016

Abstract

We design a model-based field experiment to estimate the nature and magnitude of workers’ social preferences towards their employers. We hire 446 workers for a one-time task. Within worker, we vary (i) piece rates; (ii) whether the work has payoffs only for the worker, or also for the employer; and (iii) the return to the employer. We then introduce a surprise increase or decrease in pay (‘gifts’) from the employer. We find that workers have substantial baseline social preferences towards their employers, even in the absence of repeated-game incentives. Consistent with models of warm glow or social norms, but not of pure altruism, workers exert substantially more effort when their work is consequential to their employer, but are insensitive to the precise return to the employer. Turning to reciprocity, we find little evidence of a response to unexpected positive (or negative) gifts from the employer. Our structural estimates of the social preferences suggest that, if anything, positive reciprocity in response to monetary ‘gifts’ may be larger than negative reciprocity. We revisit the results of previous field experiments on gift exchange using our model and derive a one-parameter expression for the implied reciprocity in these experiments.

Suggested Citation

DellaVigna, Stefano and List, John A. and Malmendier, Ulrike and Rao, Gautam, Estimating Social Preferences and Gift Exchange at Work (February 2016). NBER Working Paper No. w22043, Available at SSRN: https://ssrn.com/abstract=2739568

Stefano DellaVigna (Contact Author)

University of California, Berkeley ( email )

Economics Department
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John A. List

University of Chicago - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Ulrike Malmendier

University of California, Berkeley - Department of Economics ( email )

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Berkeley, CA 94720-3880
United States
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(510) 642-6615 (Fax)

HOME PAGE: http://www.econ.berkeley.edu/~ulrike/

University of California, Berkeley - Haas School of Business ( email )

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National Bureau of Economic Research (NBER)

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Institute for the Study of Labor (IZA)

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Gautam Rao

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

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