Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments

Recent discoveries in behavioral economics have led scholars to question the underpinnings of neoclassical economics. We use insights gained from one of the most influential lines of behavioral research-gift exchange-in an attempt to maximize worker effort in two quite distinct tasks: data entry for...

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Bibliographic Details
Published in:Econometrica Vol. 74; no. 5; pp. 1365 - 1384
Main Authors: Gneezy, Uri, List, John A
Format: Journal Article
Language:English
Published: Oxford, UK Blackwell Publishing Ltd 01.09.2006
Econometric Society
Blackwell
Subjects:
Academic libraries
Applications
Attorneys
Behavioral economics
Economic methodology
Economic psychology
Empirical evidence
Employers
Exact sciences and technology
Experimental economics
Experiments
field experiment
Field experiments
Fund raising
Fundraising
Gift
Gift exchange
Gift giving
Gifts
Insurance, economics, finance
Labor economics
Labor market
Labor markets
Labour economics
Labour market
Libraries
Mathematics
Money
Natural hazards
Neoclassical economics
Probability and statistics
Productivity
Research centers
Research facilities
Ritual exchange
Sciences and techniques of general use
Statistics
Volunteers
Wages
Wages & salaries
Workers
Statistical method
Economics
Wage
Statistical test
Gift exchange
Labour market
Econometrics
Field experiment
ISSN:0012-9682, 1468-0262
Online Access:Get full text
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Summary:Recent discoveries in behavioral economics have led scholars to question the underpinnings of neoclassical economics. We use insights gained from one of the most influential lines of behavioral research-gift exchange-in an attempt to maximize worker effort in two quite distinct tasks: data entry for a university library and door-to-door fundraising for a research center. In support of the received literature, our field evidence suggests that worker effort in the first few hours on the job is considerably higher in the "gift" treatment than in the "nongift" treatment. After the initial few hours, however, no difference in outcomes is observed, and overall the gift treatment yielded inferior aggregate outcomes for the employer: with the same budget we would have logged more data for our library and raised more money for our research center by using the market-clearing wage rather than by trying to induce greater effort with a gift of higher wages.
Bibliography:istex:F19A11FC4AF1D325DCF71DA7B541BB13389FC7E5
ark:/67375/WNG-1051PQM3-J
ArticleID:ECTA707
A co‐editor and four anonymous reviewers provided comments that significantly improved the study. Ernst Fehr and Glenn Harrison also provided remarks that improved the manuscript. Stefan Andersen provided fine research assistance. Craig Landry, Andreas Lange, Michael Price and Nicholas Rupp also helped with gathering the data. Jamie Brown‐Kruse worked with us in her capacity as the Director of the Hazards Center.
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ISSN:0012-9682
1468-0262
DOI:10.1111/j.1468-0262.2006.00707.x