The Gift of Begin Chosen

Antonio Nicolo, Natalia Montinari, Regine Oexl

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Abstract

We report evidence from an experiment where an employer selects one of two workers to perform a task for a fixed compensation. Workers differ in their ability. The employer's payoff depends on the worke's ability and on a non-contractible effort that the worker exerts once employed. We find that selected workers exert an effort higher than the minimum enforceable one. When the employers can send a free-text form message to the selected worker, workers with low ability exert significantly higher effort than the workers with high ability. The difference in effort overcompensates the difference in ability.
Original languageEnglish
Pages (from-to)460–479
Number of pages19
JournalExperimental Economics
Volume19
Issue number2
DOIs
Publication statusPublished - Jun 2016

Keywords

  • selection, gift exchange, reciprocity

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