Managerial Payoff and Gift-Exchange in the Field


Englmaier, Florian (LMU Munich)
Leider, Steve (University of Michigan)


We conduct a field experiment where we vary both the presence of a gift-exchange wage and the effect of the worker’s effort on the manager’s payoff. Results indicate a strong complementarity between the initial wage-gift and the agent’s ability to “repay the gift”. We control for differences in ability and reciprocal inclination and show that gift-exchange is more effective with more reciprocal agents. We present a principal-agent model with reciprocal subjects that motivates our findings. Our results help to reconcile the conflicting evidence on the efficacy of gift-exchange outside the lab.


incentives; field experiments; gift-exchange; reciprocity


C91; J33; M52


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Managerial Payoff and Gift-Exchange in the Field
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