Economic stability promotes gift-exchange in the workplace

Hernan Bejarano, Brice Corgnet and Joaquin Gomez-Minambres

Journal of Economic Behavior & Organization, 2021, vol. 187, issue C, 374-398

Abstract: We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in economic conditions. Our model shows that these changes spur disagreements between workers and employers regarding the reference wage. These disagreements tend to weaken the gift-exchange relationship, thus reducing production levels and wages. We find support for these predictions in a controlled yet realistic workplace environment. Our work also sheds light on several stylized facts regarding employment relationships, such as the increased intensity of labor conflicts when economic conditions are unstable.

Keywords: Gift-exchange; Incentives; Self-serving biases; Reference-dependent utility; Laboratory experiments; Labor conflicts (search for similar items in EconPapers)
JEL-codes: C92 D23 M54 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:187:y:2021:i:c:p:374-398

DOI: 10.1016/j.jebo.2021.04.033

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