The multi-dimensional effects of reciprocity on worker effort: evidence from a hybrid field-laboratory labour market experiment

Abstract

We examine the gift exchange hypothesis on both the quantity and quality of work using a hybrid field-laboratory labour market experiment. We recruited participants to enter survey data for a well-known charitable organisation. Workers were paid either a high or low wage. We find that although the total number of surveys entered did not vary in terms of wages, high wage workers made fewer errors and entered more surveys after controlling for errors. We further find that for low costs associated with errors, offering a low wage maximises profits; but for higher costs, paying a high ‘gift exchange’ wage maximises profits.