Gift Exchange in a Multi-Worker Firm

Tinbergen Institute Discussion Paper No. TI 2004-100/1

30 Pages Posted: 18 Sep 2004

See all articles by Sandra Maximiano

Sandra Maximiano

University of Amsterdam - Amsterdam School of Economics (ASE)

Randolph Sloof

University of Amsterdam - Faculty of Economics & Business (FEB); Tinbergen Institute

Joep Sonnemans

University of Amsterdam - Amsterdam School of Economics (ASE)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2004

Abstract

One of the main findings of a large body of gift exchange experiments is that in an incomplete contracts environment workers on average do not shirk and usually provide more than the minimum enforceable effort level. In general, 40 to 60 percent of the workers reward higher wages with higher effort. These results are observed for simple one-employer - one-worker relationships. In this paper we investigate whether they generalize to the more realistic situation in which the employer employs several workers. We compare a bilateral gift exchange game with a treatment in which each employer has four workers. We find that effort levels in the latter treatment are only marginally lower. Gift exchange thus appears to be robust to increases in the size of the workforce and intention-based reciprocity rather than social preferences seems to be the main driving force behind gift exchange.

Keywords: Gift exchange, multiple workers, reciprocity, experiments

JEL Classification: J41, C91

Suggested Citation

Maximiano, Sandra and Sloof, Randolph and Sonnemans, Joep, Gift Exchange in a Multi-Worker Firm (September 2004). Tinbergen Institute Discussion Paper No. TI 2004-100/1, Available at SSRN: https://ssrn.com/abstract=591881 or http://dx.doi.org/10.2139/ssrn.591881

Sandra Maximiano (Contact Author)

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
Amsterdam, North Holland 1018 WB
Netherlands

Randolph Sloof

University of Amsterdam - Faculty of Economics & Business (FEB) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 5241 (Phone)
+31 20 525 4310 (Fax)

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Joep Sonnemans

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
1018 WB Amsterdam
Netherlands
+31 20 525 4249 (Phone)
+31 20 525 5283 (Fax)

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