Transparency and Reciprocal Behavior in Employment Relations

Bernd Irlenbusch and Dirk Sliwka
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Bernd Irlenbusch: University of Erfurt

No 887, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: The impact of transparency on the extent of reciprocal behavior is investigated in a simple repeated gift exchange experiment, where principals set wages and agents respond by choosing effort levels. In addition to the efforts the principals’ payoffs are determined by a random component. It is shown that direct reciprocal behavior is much stronger in a more transparent situation where efforts are revealed to the principals. However, there is no significant impact of transparency on average effort as non-transparency leads to a stronger diversity in behavioral patterns such that at the same time the frequency of very low and very large effort levels increases.

Keywords: transparency; reciprocity; reputation; gift exchange; inequity aversion (search for similar items in EconPapers)
JEL-codes: C72 C91 J33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: Written 2003-10
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Related works:
Journal Article: Transparency and reciprocal behavior in employment relations (2005)
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