Gift Exchange in a Multi-Worker Firm

Sandra Maximiano, Randolph Sloof and Joep Sonnemans ()

Economic Journal, 2007, vol. 117, issue 522, 1025-1050

Abstract: One of the main findings of a large body of gift exchange experiments is that a considerable fraction of workers reward higher wages with higher effort. These results are observed for simple one-employer-one-worker relationships. In this article we investigate whether they generalise 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. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Date: 2007
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Working Paper: Gift Exchange in a Multi-worker Firm (2004)
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