RECIPROCITY UNDER BRIEF AND LONG‐TIME DELAYS

Abstract

We report the results from three experiments embedded in the same overarching design, which extends the Gift Exchange paradigm for the study of worker–employer relationships. We focus on the effect of the length of the delay, between the time at which workers learn their wage and when they choose an effort level, on the relationship between wage and effort. We compare effort choices made within a few hours with those made several weeks afterward. We find that the strength of the wage‐effort relationship decreases over time, and this change appears to be driven by workers who receive low wages. (JEL C91, J33, M52)