Gift Exchange in The Workplace: Money or Attention?

Robert Dur

Journal of the European Economic Association, 2009, vol. 7, issue 2-3, 550-560

Abstract: We develop a model of manager-employee relationships where employees care more for their manager when they are more convinced that their manager cares for them. Managers can signal their altruistic feelings towards their employees in two ways: by offering a generous wage and by giving attention. Contrary to the traditional gift-exchange hypothesis, we show that altruistic managers may offer lower wages and nevertheless build up better social-exchange relationships with their employees than egoistic managers do. In such equilibria, a low wage signals to employees that the manager has something else to offer-namely, attention-which will induce the employee to stay at the firm and work hard. Our predictions are well in line with some recent empirical findings about gift exchange in the field. (JEL: D86, J41, M50, M54, M55) (c) 2009 by the European Economic Association.

JEL-codes: D86 J41 M50 M54 M55 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (79)

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Working Paper: Gift Exchange in the Workplace: Money or Attention? (2008)
Working Paper: Gift Exchange in the Workplace: Money or Attention? (2008)
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