When Will There Be Gift Exchange? Addressing the Lab-Field Debate with Laboratory Gift Exchange Experiments

Gift exchange experiments have demonstrated that norms can affect labor market outcomes and provided an explanation for involuntary unemployment. However, conflicting results from laboratory and field experiments have questioned the relevance of gift exchange and helped spark an ongoing debate about the relative merits of the lab and field. This paper uses laboratory experiments to identify three parameters that affect the likelihood workers engage in gift exchange, helping to reconcile results across lab and field experiments. Gift exchange is more prevalent when workers are rich relative to the firm, worker effort is efficient, or workers have a restricted action space.

[1]  E. Fehr,et al.  Reciprocity as a contract enforcement device: experimental evidence , 1997 .

[2]  B. McCarl,et al.  Economics , 1870, The Indian medical gazette.

[3]  E. Fehr.  A Theory of Fairness, Competition and Cooperation , 1998 .

[4]  Colin F. Camerer,et al.  The Promise and Success of Lab-Field Generalizability in Experimental Economics: A Critical Reply to Levitt and List , 2011 .

[5]  J. Kagel.  Laboratory Experiments: The Lab in Relationship to Field Experiments, Field Data, and Economic Theory , 2015 .

[6]  John A. List,et al.  Homo economicus Evolves , 2008, Science.

[7]  A. H. Murphy,et al.  On the Generalizability of Experimental Results , 1974 .

[8]  Heike Hennig-Schmidt,et al.  In search of worker's real effort reciprocity: A field and a laboratory experiment , 2010 .

[9]  J. Brandts,et al.  Do Labour Market Conditions Affect Gift Exchange? Some Experimental Evidence , 2003 .

[10]  Judd B. Kessler,et al.  The External Validity of Laboratory Experiments: Qualitative Rather Than Quantitative Effects , 2015 .

[11]  J. Heckman,et al.  Lab Experiments Are a Major Source of Knowledge in the Social Sciences , 2009, Science.

[12]  G. Charness.  Attribution and Reciprocity in an Experimental Labor Market , 2002, Journal of Labor Economics.

[13]  Robert L. Slonim,et al.  Opting-in: Participation bias in economic experiments , 2013 .

[14]  J. Kagel,et al.  How Robust is Laboratory Gift Exchange? , 2001 .

[15]  S. Gächter,et al.  Reputation and Reciprocity: Consequences for the Labour Relation , 2001, SSRN Electronic Journal.

[16]  Ernst Fehr,et al.  Reciprocity as a Contract Enforcement Device , 2001 .

[17]  John H. Kagel,et al.  Partial Gift Exchange in an Experimental Labor Market: Impact of Subject Population Differences, Productivity Differences, and Effort Requests on Behavior* , 2002, Journal of Labor Economics.

[18]  George A. Akerlof.  Labor Contracts as Partial Gift Exchange , 1982 .

[19]  U. Fischbacher.  z-Tree: Zurich toolbox for ready-made economic experiments , 1999 .

[20]  Joyce E. Berg,et al.  Trust, Reciprocity, and Social History , 1995 .

[21]  C. Puppe,et al.  The Currency of Reciprocity - Gift-Exchange in the Workplace , 2011 .

[22]  C. Bicchieri,et al.  When Equality Trumps Reciprocity , 2010 .

[23]  John A. List,et al.  What Do Laboratory Experiments Tell Us About the Real World , 2006 .

[24]  Gary Charness,et al.  Responsibility and Effort in an Experimental Labor Market , 2000 .

[25]  Florian Englmaier,et al.  Managerial Payoff and Gift-Exchange in the Field , 2012, Review of Industrial Organization.

[26]  M. Rabin,et al.  UNDERSTANDING SOCIAL PREFERENCES WITH SIMPLE TESTS , 2001 .

[27]  N. Bardsley.  Dictator game giving: altruism or artefact? , 2008 .

[28]  G. Charness,et al.  Intention and Stochastic Outcomes: An Experimental Study , 2005 .

[29]  G. Harrison,et al.  Field experiments , 1924, The Journal of Agricultural Science.

[30]  E. Fehr,et al.  Does Fairness Prevent Market Clearing? An Experimental Investigation , 1993 .

[31]  Steven D. Levitt,et al.  Viewpoint: On the Generalizability of Lab Behaviour to the Field , 2007 .

[32]  George A. Akerlof.  Gift Exchange and Efficiency-Wage Theory: Four Views , 1984 .

[33]  J. List.  The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions , 2005 .

[34]  Ernst Fehr,et al.  A Behavioral Account of the Labor Market: The Role of Fairness Concerns , 2008 .

[35]  Armin Falk,et al.  A Theory of Reciprocity , 2001, Games Econ. Behav..

[36]  Robert L. Slonim,et al.  Opting-In: Participation Biases in the Lab , 2012, SSRN Electronic Journal.

[37]  Steven D. Levitt,et al.  What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World , 2007 .

[38]  Charles Bellemare,et al.  Gift giving and worker productivity: Evidence from a firm-level experiment , 2009, Games Econ. Behav..

[39]  A. Roth.  Is Experimental Economics Living Up to Its Promise , 2010 .

[40]  Janet L. Yellen,et al.  The Fair Wage-Effort Hypothesis and Unemployment , 1990 .

[41]  Ernst Fehr,et al.  Fairness and Effort-Evidence from a Field Experiment , 2008 .

[42]  E. Fehr,et al.  When Social Norms Overpower Competition: Gift Exchange in Experimental Labor Markets , 1998, Journal of Labor Economics.

[43]  John A. List,et al.  On the Generalizability of Experimental Results in Economics , 2012 .

[44]  J. List.  On the Interpretation of Giving in Dictator Games , 2007, Journal of Political Economy.