The Sequencing of Gift Exchange: A Field Trial

16 Pages Posted: 1 May 2017

See all articles by Jeffrey P. Carpenter

Jeffrey P. Carpenter

Middlebury College - Department of Economics; IZA Institute of Labor Economics

Abstract

There is now an extensive literature on "gift exchange" showing that when principals and agents can trade "gifts" (rewards that should not emerge in a competitive equilibrium), exchange becomes more efficient. However, it is not obvious how gift exchange should be organized if the principal's goal is to increase the performance of a reciprocal agent. Specifically, who should make the first gift, the principal or the agent? Although both orderings, by themselves, have been hypothesized and examined in theory and experiments, the literature is largely silent on the comparison. I report the results of a field experiment that compares the principal-first and agent-first orderings to each other and a gift-less control. Consistent with the previous experimental literature, I find that principal-first, gifts do increase agent performance. Unlike the literature, however, I find that agent-first, gifts are also effective. Comparing the two, I see that the agent-first ordering works best, is clearly cheaper to implement and differences appear on both the extensive and intensive margins.

Keywords: gift exchange, reciprocity, social norm, incentives, field experiment, charity, fundraising

JEL Classification: C93, D03, D64, H41, L30, M30

Suggested Citation

Carpenter, Jeffrey P., The Sequencing of Gift Exchange: A Field Trial. IZA Discussion Paper No. 10736. Available at SSRN: https://ssrn.com/abstract=2960545

Jeffrey P. Carpenter (Contact Author)

Middlebury College - Department of Economics ( email )

Munroe Hall
Middlebury, VT 05753
United States
802-443-3241 (Phone)
802-443-2084 (Fax)

HOME PAGE: http://community.middlebury.edu/~jcarpent/index.ht

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
9
Abstract Views
113
PlumX Metrics