Reputation and Reciprocity: Consequences for the Labour Relation

Simon Gaechter and Armin Falk
Authors registered in the RePEc Author Service: Simon Gächter

No 19, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: Recent evidence highlights the importance of social norms in many economic relations. However, many of these relationships are long-term and provide repeated game incentives for performance. We experimentally investigate interaction effects of reciprocity and repeated game incentives in two treatments (one-shot and repeated) of a gift-exchange game. In both treatments we observe reciprocity, which is strengthened in the repeated game. A detailed analysis shows that in the repeated game some subjects imitate reciprocity. Thus, reciprocity and repeated game incentives reinforce each other. Observed behaviour is robust against experience. We conclude that a long-term interaction is a �reciprocity-compatible� contract enforcement device.

Keywords: reciprocity; reputation; repeated games; incomplete contracts (search for similar items in EconPapers)
JEL-codes: C91 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (102)

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Related works:
Journal Article: Reputation and Reciprocity: Consequences for the Labour Relation (2002)
Working Paper: Reputation and Reciprocity: Consequences for Labour Relations (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:019

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