Gift exchange and the separation of ownership and control

Maximiano, Sandra; Sloof, Randolph; Sonnemans, Joep

doi:10.1016/j.geb.2012.07.004

Cited by 20 publications

(8 citation statements)

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“…They report that workers still reward higher wages with higher effort levels, even when the manager, who is responsible for setting the wage, does not share the firm's profits at all. In contrast to our paper, the firm owner in Maximiano et al (2013) cannot influence the manager's wage and the manager does not contribute to the firm's revenue at all. Thus, fairness considerations regarding the managerial compensation are not tested for, while they are the focus of our experiment.…”

Section: Introductioncontrasting

confidence: 99%

“…10 The result related to workers is consistent with previous research on gift-exchange labor markets. Even in a more complex organizational hierarchy than the typical one firm/one worker environment, we find that the higher the wage, the higher the effort level chosen by the workers, in line with Maximiano et al (2013).…”

Section: A Own Wages and Effortssupporting

confidence: 65%

“…Efficiency preferences and the positive forms of reciprocity and inequity aversion are typically used to explain gift-exchange behavior. 3 However, more complex, multilateral work relations are not deeply studied yet and have mainly focused on horizontal fairness considerations among workers at the same hierarchy level (Abeler et al 2010;Angelova et al 2012;Bartling and von Siemens 2011;Charness and Kuhn 2007;Gächter and Thöni 2010;Gächter et al 2012;Maximiano et al 2013;Nosenzo 2013). There exists, to our best knowledge, no experimental study which considers fairness effects in regard to managerial compensations.…”

Section: Introductionmentioning

confidence: 99%

“…An experimental study which distinguishes explicitly between a manager and a firm owner is Maximiano et al (2013). They report that workers still reward higher wages with higher effort levels, even when the manager, who is responsible for setting the wage, does not share the firm's profits at all.…”

Section: Introductionmentioning

confidence: 99%

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Does Managerial Compensation Affect Workers' Effort?

Hesse

Rivas²

2015

Journal of Applied Economics

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We explore in a two-level gift-exchange experiment whether the managerial compensation influences workers' effort decisions. Firstly, we find that there exists a strong positive relation between own wage and effort levels for the workers, while the managers' effort reaches a maximum for intermediate wages and decreases for very high wages. Secondly, our data suggests that the managerial compensations are significantly negatively correlated with the workers' effort choices: the higher the manager's wage, the lower the effort level chosen by the workers. JEL classification codes: C92, J33, M12, M52

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Section: Introductioncontrasting

confidence: 99%

Section: A Own Wages and Effortssupporting

confidence: 65%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does Managerial Compensation Affect Workers' Effort?

Hesse

Rivas²

2015

Journal of Applied Economics

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“…There is a vast experimental literature on gift exchange games, initiated by Fehr et al (1993) and followed by many applications both in the lab (Fehr et al, 1997, 1998a,b, Fehr and Falk, 1999, Hannan et al, 2002, Charness, 2004, Eriksson and Villeval, 2012, Maximiano et al, 2013 and in the field (Gneezy and List, 2006, Bellemare and Shearer, 2009, Hennig-Schmidt et al, 2010, Kube et al, 2013. These studies all focus on two-tier settings and test the positive effect of reciprocity in limiting opportunistic behaviors of workers.…”

Section: Related Literaturementioning

confidence: 99%

Backscratching in Hierarchical Organizations

Montinari

Nicolò

2015

SSRN Journal

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In this paper we investigate the role of reciprocity in sustaining the emergence of implicit collusive agreements in hierarchical organizations. We conduct a laboratory experiment in which an agent hires, on behalf of the principal, one worker out of two candidates. The two candidates differ in their ability and, once employed, the worker chooses a level of non-contractible effort to exert in two tasks: one benefits the organization (that is both the principal and the agent) while the other one is less profitable, only benefits the agent and provides him with higher earnings. We provide evidence that: i) low ability workers are more likely to exert effort in the task that is exclusively beneficial to the agent; ii) as a consequence, agents distort the hiring process in favor of the low ability workers and iii) sharing a small part of the organization's profits with the workers alleviates their effort distortion. JEL classification: C91, J50, L14, M52

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Experimental Labor Markets and Policy Considerations: Incomplete Contracts and Macroeconomic Aspects

Casoria

Riedl

2013

A Collection of Surveys on Market Experiments

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 7102 December 2012 ABSTRACT Experimental Labor Markets and Policy Considerations: Incomplete Contracts and Macroeconomic AspectsThis survey focuses on experimental labor markets investigating two aspects that deem us important for a better understanding of labor market relations and the consequences for labor market policies. The first part of the survey is dedicated to papers that assess the prevalence of reciprocal considerations in incomplete labor contracts. The second part summarizes the relatively small but growing experimental literature exploring labor issues in a macroeconomics and public finance setting and studying the interaction between taxation and labor market outcomes.JEL Classification: C90, C92, C93, D01, D51, E24, E62, F41, J01, J08

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Gift exchange and the separation of ownership and control

Abstract: Gift exchange and the separation of ownership and controlMaximiano, S.M.S.N.; Sloof, R.; Sonnemans, J.H.

Cited by 20 publications

References 50 publications

Does Managerial Compensation Affect Workers' Effort?

Does Managerial Compensation Affect Workers' Effort?

Backscratching in Hierarchical Organizations

Experimental Labor Markets and Policy Considerations: Incomplete Contracts and Macroeconomic Aspects

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