Transparency and Reciprocal Behavior

Bernd Irlenbusch () and Dirk Sliwka
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Bernd Irlenbusch: University of Cologne

No 887, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The impact of transparency on the extent of reciprocal behavior is investigated in a simple repeated gift exchange experiment, where principals set wages and agents respond by choosing effort levels. In addition to the efforts the principals’ payoffs are determined by a random component. It is shown that direct reciprocal behavior is much stronger in a more transparent situation where efforts are revealed to the principals. However, there is no significant impact of transparency on average effort as non-transparency leads to a stronger diversity in behavioral patterns such that at the same time the frequency of very low and very large effort levels increases.

Keywords: inequity aversion; gift exchange; reputation; reciprocity; transparency (search for similar items in EconPapers)
JEL-codes: C72 C91 J33 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2003-10
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (6)

Published - published in: Journal of Economic Behavior and Organization, 2005, 56 (3), 383-403

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