 Leveraging upfront payments to curb employee misbehavior: Evidence from a natural field experimentJohn List and Fatemeh Momeni European Economic Review, 2020, vol. 130, issue C Abstract: We use a natural field experiment in which we hired over 2000 workers from an online labor market to explore how upfront payment affects worker motivation and misbehavior on the job. We start with a simple theory that shows paying upfront can increase misbehavior through reducing the perceived costs of cheating, but it can decrease misbehavior through generating a gift-exchange effect. Motivated by the theory, we designed a task that provided workers with opportunities to reciprocate or misbehave. A unique aspect of our design is that we are permitted an opportunity to measure the curvature of the gift-exchange value of the upfront payment. Our results suggest paying workers upfront induces a gift-exchange effect that is concave in the share of total wage paid upfront. Moreover, the impact is strong enough to suggest that small upfront payments are a cost-effective means for an employer to curb employee misbehavior. Keywords: Employee misbehavior; Cheating; Gift-exchange; Upfront payment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:130:y:2020:i:c:s0014292120302312 DOI: 10.1016/j.euroecorev.2020.103601 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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