Academic literature on the topic 'Gift-exchange experiment'

What determines reciprocity in employment relations? We conducted a controlled field experiment to measure the extent to which monetary and nonmonetary gifts affect workers' performance. We find that nonmonetary gifts have a much stronger impact than monetary gifts of equivalent value. We also observe that when workers are offered the choice, they prefer receiving money, but reciprocate as if they received a nonmonetary gift. This result is consistent with the common saying, “it's the thought that counts.” We underline this point by showing that monetary gifts can effectively trigger reciprocity if the employer invests more time and effort into the gift's presentation.

Research has shown that extrinsic incentives can crowd out intrinsic motivation in many contexts. Despite this, many nonprofits offer conditional thank-you gifts, such as mugs or tote bags, in exchange for donations. In collaboration with a nonprofit, this study implements a direct mail field experiment and demonstrates that thank-you gifts reduced donation rates in a fundraising campaign. Attention-based multiattribute choice models suggest that this is because prospective donors shift attention to the salient gift offer, causing them to underweight less salient intrinsic motives. Attention to the gift may also cause individuals to adopt a more cost–benefit mindset, further de-emphasizing intrinsic motives. Consistent with these hypotheses, crowding out was driven by those who donated higher amounts in the previous year (i.e., those who likely had higher intrinsic motivation). In a complementary online experiment, thank-you gifts also reduced donation rates but only when the gift was visually salient. This corroborates the mediating role of attention in crowding out. Taken together, the laboratory and field results demonstrate that this fundraising technique can be demotivating in some contexts and that this may occur through an attention-based mechanism.

ABSTRACT Employers often rely on informal controls such as trust to motivate organizationally desirable behaviors from their workers by appealing to the latter's reciprocity. Notably, trust and reciprocity can promote a “gift exchange” between employers and workers. Using an experiment, I investigate whether labor market competition moderates the emergence of a gift exchange in labor markets in which signing bonus offers serve as a potential signal of trust and the duration of the employment relationship is endogenously determined. I find that offering a signing bonus more positively affects both workers' beliefs about the employer's trust in them and their effort when there is an excess supply of workers than when there is an excess demand for workers. I also find that the initial effects of signing bonuses may not persist over time. Additional analyses suggest that both employers' and workers' expectations may affect whether and how trust and reciprocity develop over time.

Groups make decisions more rational than individuals do. This may depend by several factors. The learning effect of the gaming mechanism has an important role, but above all knowledge of other groups member's preferences. In literature however, results are mixed. I present two experiments in order to test the learning effect in group decision-making. The first one where the learning effect is limited and a second one where the learning effect is bolstered. I find that learning effect is a mechanism that may explain differences in results. Knowledge of part of member’s preferences can have a role in the decision-making process because when there is no learning effect the results are far away from those hypothesized by economic theory. While if the mechanism is expanded, results are similar to the control treatment.

Mestrado em Economia
I report a reversed Multi-Employee gift exchange laboratory experiment considering immigrants and local workers. My main goal is to investigate the existence of statistical discrimination. In the experiment, firms make wage offers using the strategy method, while workers choose an effort level. Higher the effort, higher the cost to workers. There is a partial mechanism available to workers for punishing or rewarding firm’s offers. Con sistent with the gift exchange hypothesis, workers provided more effort at higher wages and performed a task as retribution. Immigrants provide slightly less effort than locals at higher wages, but this is far to be significant. Firms showed a wage-effort positive relation consistent with the Efficiency Wage Hypothesis. Firm’s non-binding effort requests were honoured, resulting in increased overall number of tasks performed by workers. Finally, no evidence of statistical discrimination was found in this study
Este estudo corresponde aos resultados duma experiência de laboratório que usa o jogo de troca de presentes invertido, com dois tipos de trabalhadores, imigrantes e locais. O objetivo principal é investigar a existência de discriminação estatística. Nesta experiência, as empresas fazem ofertas salariais usando o strategy method, enquanto os trabalhadores escolhem um nível de esforço. Quanto maior o esforço, maior o custo associado. Existe um mecanismo parcial disponível aos trabalhadores para punir ou recompensar as ofertas da empresa. Consistente com a hipótese da troca de presentes, os trabalhadores esforçam-se mais com salários mais altos e realizam uma tarefa em retribuição. Os imigrantes oferecem menos esforço do que os locais com salários mais altos, mas isto está longe de ser estatisticamente significativo. Para as empresas existe uma relação positiva esforço-salário consistente com a Hipótese da Eficiência Salarial. Os acordos não vinculativos da empresa-trabalhador foram cumpridos, resultando num aumento do número total de tarefas realizadas pelos trabalhadores. Finalmente, nenhuma evidência de discriminação estatística foi encontrada neste estudo.
info:eu-repo/semantics/publishedVersion

Thesis (Ph. D.) -- University of Maryland, College Park, 2009.
Thesis research directed by: Dept. of Economics. Title from t.p. of PDF. Includes bibliographical references. Published by UMI Dissertation Services, Ann Arbor, Mich. Also available in paper.

The majority of existing educational programs dispense incentives on the condition that students achieve predetermined education targets. Behavioural economists in recent periods have stressed the importance of framing incentives and have begun evaluating the most effective ways to implement incentives and education-based targets. This thesis takes an innovative approach to explore the effects of unconditional incentives and commitment structures on the key educational indicators of Indigenous high school students' attendance rates and effort levels. In doing so, this thesis also addresses a key policy issue in looking at different ways to improve school attendance rates for Indigenous high school students.

This thesis discusses the importance of self-selection to understand how individuals behave and respond to incentives. Individuals self-select themselves into their preferred contracts in a number of ways. Labour contracts are a clear example where individuals choose a job according to its characteristics, whilst also aligning to their personal preferences and skills. The reasons why a worker chooses a job can predict how likely she or he will respond to different incentives, such as financial or social incentives. The economics wage efficiency theory predicts that a higher wage can both attract more productive workers and enhance performance. Laboratory experiments have constituently proven this theory, showing that when employers pay workers a ‘fair’ wage, workers reciprocate by working harder, as in a gift exchange fashion. Other studies have argued that social incentives can be equally effective at achieving the same goal: employers that donate a portion of their profits to charity, often known as Corporate Social Responsibility (CSR), can be attractive to workers and motivate them to work harder even at wages that are lower than competitor employers. More recently the gift exchange theory was challenged by field experiments that found little evidence of reciprocity. In the first chapter on this thesis, I argue that an important gap has not been addressed by the literature, namely, how sorting mechanisms can affect reciprocal behaviour. In lab experiments, employers and workers are often randomly and bilaterally matched in every round of a game. Whilst outside the controlled laboratory environment, workers choose the employer they want to work for and then decide how hard they are willing to work. To address this gap, I designed a modified version of the gift exchange game – the most commonly used game to study experimental labour markets – where two employers and one worker are randomly grouped together. In this experiment employers can use their initial capital to make wage offers to workers and donate any percentage of their potential profits to charity (i.e. the level of CSR). In the control group workers are randomly matched to one of the two employers, as in other standard laboratory settings. In the treatment group, in every round workers can choose an employer from a set of two competitors, before determining their level of effort. The first key result I found is that workers always choose the employer offering the higher wage. Furthermore, workers choose the employers offering a higher level of CSR only when the wage offer is identical to that of a competitor. I also find that wages have a larger marginal effect than CSR at enhancing workers’ effort. The second contribution of this chapter is its reconciliation of the mixed evidence between field experiments and lab experiments. I find that the presence of competition among employers reduces the level of reciprocity from workers. I argue that workers already reciprocate higher wage offers by choosing an employer over a competitor, hence feeling less pressure to work harder once in the job. Based on findings from the first experiment, I returned to the lab to test the role of competition and self-selection in a modified version of the earlier gift exchange game, this time without the presence of CSR. The results of this second experiment are the topic of Chapter 2. I again find that the presence of competition reduces reciprocity, supporting findings from Chapter 1. Another contribution of this chapter is the study of how external wage offers affect workers’ behaviour. In the control condition of the experiment workers cannot select their preferred wage offer and are randomly matched to one of the two employers, but they can still see the offer of the unmatched employer. I find that this external wage offer influences workers’ behaviour as a reference point: after controlling for all other factors, when workers are randomly matched to the employer offering a higher wage they provide higher levels of effort. More striking and significant is the evidence of loss aversion: subjects were more responsive to subjective losses than gains – that is, being paired to an employer who offered a lower wage was more ‘painful’ to the worker and led to a stronger (negative) reaction, than being paired to the higher offer employer, which led to a weaker (positive) reaction. In other words, workers penalised more employers that offered a lower wage than rewarding employers that offered a higher wage. Previous studies showed that reference points can influence workers’ effort. These include a target income they set for themselves or the amount other similar workers earn. In this experiment we show that another important reference point is the wage offered by another employer. If the current employer offers a wage that is above that of an external employer, workers will reciprocate by working harder, beyond the reciprocal response that would have occurred without the presence of the outside offer. If the wage offer is lower than that of a competitor, the worker will punish the employer with significantly lower effort. In the last section of the second chapter I compare results from the two experiments and show that in a competitive environment employers must compete more aggressively by offering higher wages to attract and motivate workers. Shifting resources away from wage offers to increase the level of CSR can lead to lower levels of reciprocal behaviour from workers and, consequently, reduce employers’ earnings. Employers interested in engaging in Corporate Social Responsibility initiatives as a Human Resources Management strategy to attract and motivate workers should consider how different types of workers will have varied responses to social incentives compared to more traditional financial incentives. Moreover, employers should understand the characteristics of the job that attracted their workforce in the first place so as to design incentives that reflect their preferences. In the last chapter of this thesis I explore the role of self-selection in determining the effectiveness of defaults. Defaults proved to influence behaviour across a range of areas, from retirement savings to organ donations. Perhaps the main reason why defaults are effective is that individuals have a strong tendency to remain in their current situation rather changing to an alternative option. This is often referred to as ‘status quo bias’. Seeing as this bias strongly influences human behaviour, it is important to understand why and how individuals self-select into a situation or contract in the first place in order to design effective defaults. At the same time, a key challenge presented by defaults is that they can reduce an individuals’ sense of control, and be ineffective or counterproductive if they do not reflect the decision-maker’s preferences and past behaviour. I study the role of defaults in a previously unexplored setting where a preference for control might be stronger than in other contexts: charitable giving. I analyse results of a field experiment ran by an NGO hosting an online peer-to-peer microlending platform. Lenders who had their loans fully repaid, but did not take any action for more than a year, received an email inviting them to use their money by a certain date in any way they preferred – withdraw, lend, donate or leave idle. In two treatment groups, lenders were told that if they did not take any action by the given date, their money was automatically going to be donated to the organisation (‘default donation’) or re-lent to a group of borrowers on their behalf (‘default loan’). Results show that both defaults were more effective at increasing the proportion of individuals giving to charity and the average amount given, compared to a simple ask. However, the default loan treatment was significantly more effective than the default donation. This suggests that to influence behaviour without risk of backfiring, defaults should be designed to consider individuals’ past behaviour and self-selection. Government agencies, not-for-profit, and private sector organisations interested in implementing defaults should first aim to understand why and how individuals find themselves in a specific situation or contract in the first place. Defaults that reflect a decision-maker’s preferences have a higher chance of achieving their intended objectives. Preferences can often be elicited by observing past behaviour. Furthermore, it is important to understand that choices made in the past can influence behaviour as reference points. Testing and evaluating different types of defaults can help improve their effectiveness and avoid counterproductive consequences. The three chapters in this thesis can be considered as individual standalone papers. The reader can review each chapter separately without loss of context. Each chapter includes an introduction, a literature review and hypotheses, and a discussion of the results from the experiments. Recommendations for future research and policy are discussed in the conclusions of each chapter.

Mestrado em Economia
A existência de comportamentos recíprocos, em vez de comportamentos puramente egoístas, tem implicações relevantes nas relações laborais reguladas por contratos incompletos. Por reciprocidade entende-se a disponibilidade para sacrificar recursos quer para recompensar actos amigáveis (reciprocidade positiva) quer para punir actos não amigáveis (reciprocidade negativa). Nesta dissertação apresentam-se modelos que desenvolvem a teoria dos jogos para incluir comportamentos recíprocos e através de métodos experimentais comprova-se a sua existência no mercado de trabalho. É utilizado um jogo designado por troca de ofertas. Neste, uma empresa tem a possibilidade de conceder uma oferta ao seu trabalhador através de um salário superior ao que este obteria se abandonasse o emprego actual. O trabalhador, em seguida, pode conceder uma oferta à empresa escolhendo um nível de esforço superior ao requerido. Comprova-se experimentalmente a existência desta troca de ofertas, que é explicada pela reciprocidade e contraria a previsão da teoria dos jogos convencional de agentes racionais e egoístas não suportarem os custos associados à concessão de ofertas. A consideração da reciprocidade alarga, assim, o campo de previsão do economista. No jogo de troca de ofertas, tradicionalmente considerado na literatura, apenas existe a alternativa de reciprocar positivamente. Criámos um desenho experimental em que tanto se pode reciprocar positiva como negativamente (troca de ofertas e ofensas). Os resultados das sessões experimentais revelam que os indivíduos usam as duas possibilidades. No entanto, com as novas condições experimentais, há uma diminuição dos comportamentos recíprocos e uma aproximação à previsão da teoria dos jogos convencional. Conclui-se esta dissertação argumentando que os comportamentos dependem das características do contexto de interacção, sendo que umas favorecem o homo oeconomicus e outras o homo reciprocans.
Reciprocal behavior, as opposed to selfish behavior, has powerful implications in labor relations regulated by incomplete contracts. Reciprocity is considered as the willingness to sacrifice resources to reward kind acts (positive reciprocity) and punish unkind acts (negative reciprocity). In this dissertation we describe models that develop game theory in order to allow for reciprocal behavior. Moreover, through experimental methods we observe reciprocal behavior in the labor market. A gift exchange game is used, in which a firm can give a gift to the worker by paying a wage in excess of what the worker could receive if he left his current job. The worker can, then, offer a gift to the firm by choosing an effort level higher than the minimum standard. Experimental data is consistent with gift exchange, which is explained by reciprocity and it is at odds with game theory prediction that rational workers and firms do not support the costs associated with gift giving. Thus, the consideration of reciprocity enlarges economists' scope of predictions. In the gift exchange game, usually considered in the literature, one can only positively reciprocate. The experimental design was changed so that there is the possibility of positive and negative reciprocity (gift and offense exchange). Experimental results reveal that individuals use these two alternatives. However, reciprocal behavior decreases and deviations from conventional game theory prediction decrease as well. Finally, it is argued that human behavior depends on the characteristics of the interaction context, so that some enhance behavior according to homo oeconomicus and others behavior consistent with homo reciprocans.

This chapter examines Rembrandt’s embrace of gift exchange over his career and analyzes the works he created to function as gifts among favored patrons, collectors, and intimates. Rembrandt’s gifts to important patrons and other figures in the 1630s largely conform to the conventions and courtesies expected of gift transactions. From the late 1640s through the 1660s, as Rembrandt’s primary supporters shifted to liefhebbers, gentlemen-dealers, and cultured members of the burgher class, however, he intensified his engagement and became more experimental with gift giving. Through highly distinctive prints designed to circulate as gifts, Rembrandt enlisted the gift economy to nurture ties with his inner sanctum, harnessing the ethics of gift giving to cultivate a unique position in the Dutch art world.