Journal
MANAGEMENT SCIENCE
Volume 64, Issue 9, Pages 4365-4388Publisher
INFORMS
DOI: 10.1287/mnsc.2017.2801
Keywords
incentives; gift exchange; field experiments; laboratory experiments
Funding
- Whitebox Grants in Behavioral Economics, Yale University
- Institution for Social and Policy Studies, Yale University
Ask authors/readers for more resources
Tests of gift exchange, wherein agents receive excess wages which are noncontingent on performance in one-shot settings, have yielded contradictory evidence: they sometimes find effort boosts, consistent with gift exchange, whereas they sometimes find no effort increases, consistent with a standard model. We identify eight confounds that could have led to the mixed evidence-agent disutility from being viewed as selfish, small samples, insufficient wage raises, an effort ceiling, fatigue, selection of abler workers, reemployment concerns, and peer effects-and run a comprehensive test addressing them. Our test consisted of a field experiment hiring workers for a data entry job, followed by laboratory games assessing their prosocial behavior. After addressing these confounds, we find that behavior during the field test was consistent with a standard model: workers did not repay fixed wage raises with an effort boost, but they did raise effort in response to a piece rate. The piece-rate scheme was also more efficient: the effort boost came at lower expense than paying fixed wage raises. Further, workers who behaved prosocially in laboratory games did not behave prosocially in the field.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available