Reciprocity and Incentive Pay in the Workplace

Robert Dur, Arjan Non and Hein Roelfsema ()

No 08-080/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This discussion paper has resulted in a publication in the Journal of Economic Psychology , 31(4), 676-686.

We study optimal incentive contracts for workers who are reciprocal to management attention. When neither worker's effort nor manager's attention can be contracted, a double moral-hazard problem arises, implying that reciprocal workers should be given weak financial incentives. In a multiple-agent setting, this problem can be resolved using promotion incentives. We test these predictions using German Socio-Economic Panel data. We find that workers who are more reciprocal are significantly more likely to receive promotion incentives, while there is no such relation for individual bonus pay.

Keywords: reciprocity; social exchange; incentive contracts; double moral hazard; GSOEP (search for similar items in EconPapers)
JEL-codes: D86 J41 M51 M52 M54 M55 (search for similar items in EconPapers)
Date: 2008-09-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Reciprocity and incentive pay in the workplace (2010)
Working Paper: Reciprocity and Incentive Pay in the Workplace (2010)
Working Paper: Reciprocity and Incentive Pay in the Workplace (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080080

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