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Social Preferences or Personal Career Concerns? Field Evidence on Positive and Negative Reciprocity in the Workplace

Leif Brandes () and Egon Franck ()

No 134, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: This paper provides non-experimental field evidence on positive and negative worker reciprocity. We analyze the performance reactions of professional workers to fair and unfair wage allocations in their natural environment. The objects of interest are professional soccer players in the German Bundesliga. This environment enables us to circumvent the main problems of observational studies on reciprocity because there is substantial transparency in individual player values and performance. Our main finding is that workers exhibit both positive and negative reciprocity toward employers who deviate from a playerÕs perception of a fair market wage. This perception of a fair wage follows from a Mincer-type wage equation that incorporates a workerÕs past performance. The different results between changing and non-changing players are in line with theories of fairness perception but cannot be explained by private information from the employers or the personal career concerns of the players. Altogether, our findings provide strong evidence for the external validity of previous laboratory results on gift exchange in the labor market.

Keywords: Reciprocity; Fairness; Gift-Exchange; Job Change (search for similar items in EconPapers)
JEL-codes: C23 D84 J30 (search for similar items in EconPapers)
Date: 2010-05, Revised 2012-05
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Forthcoming. Journal of Economic Psychology

Downloads: (external link) Revised version, 2012 (application/pdf)

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