Template-type: ReDif-Paper 1.0 Author-Name: Dariel, A. Author-Name: Riedl, A.M. Author-workplace-name: Microeconomics & Public Economics Title: Reciprocal preferences and the unraveling of gift-exchange Abstract: We elicit reciprocal preferences in a firm-worker gift-exchange setting and relate them to actual behavior in a repeated gift-exchange game. We find that only a small minority of 10 percent of workers is materially selfish whereas 90 percent exhibit reciprocal preferences. However, the intensity of reciprocal preferences is weak in the sense that firms maximize profits by not relying on gift-exchange but by offering the lowest possible wage. Workers behavior in the repeated gift-exchange game is predicted by their elicited preferences, but the correlation between preferences and behavior is imperfect. Together with profit maximizing behavior of firms these observations can explain the observed unraveling of gift-exchange over time in our experiment and some recent field experiments.
Series: GSBE Research Memoranda Creation-Date: 20130101 Number: 034 File-URL: https://cris.maastrichtuniversity.nl/ws/files/598014/guid-e16dc1c4-6a0e-433a-8b89-ae4c88327fde-ASSET1.0.pdf File-Format: application/pdf File-Size: 672631 Handle: Repec:unm:umagsb:2013034 DOI: 10.26481/umagsb.2013034