Towards an understanding of the relative strengths of positive and negative reciprocity
Journal Title: Judgment and Decision Making - Year 2010, Vol 5, Issue 7
Abstract
Scholars in economics and psychology have created a large literature studying reward, punishment and reciprocity. Labor markets constitute a popular application of this body of work, with particular emphasis on how reciprocity helps regulate workplace relationships where managers are unable to perfectly monitor workers. We study how idiosyncratic features of the labor market (compared to most scenarios in which reciprocity applies) affect the nature of worker reciprocity. In particular, we show how having an excess supply of workers (simulating unemployment) and managers who can observe the reciprocal behavior of workers and hire/fire them on that basis (simulating the reputational concerns inherent in labor market transactions) profoundly alters worker reciprocity. In the absence of reputational concerns, workers tend to reward kind behavior and punish unkind behavior by managers in approximately equal measure. In the presence of reputational concerns, workers exhibit a marked increase (decrease) in the propensity to reward kind (punish unkind) behavior by managers. We demonstrate how this is a consequence of workers and managers responding to changes in the strategic incentives to reward and punish.
Authors and Affiliations
Omar Al-Ubaydli, Uri Gneezy, Min Sok Lee and John A. List
Keywords
Related Articles
- EP ID EP677772
- DOI -
- Views 120
- Downloads 0
How well can adolescents really judge risk? Simple, self reported risk factors out-predict teens’ self estimates of personal risk
Recent investigations of adolescents’ beliefs about risk have led to surprisingly optimistic conclusions: Teens’ self estimates of their likelihood of experiencing various life events not only correlate sensibly with rel...
Subjective integration of probabilistic information from experience and description
I report a new judgment task designed to investigate the subjective weights allotted to experience and description when integrating information from the two sources. Subjects estimated the percentage of red balls in a ba...
Measurement-induced focusing and the magnitude of loss aversion: The difference between comparing gains to losses and losses to gains
Research has identified loss aversion as a strong and robust phenomenon, but has also revealed some moderators affecting the magnitude of its effect on decision making. In the current article, we draw attention to the fa...
Time preference and its relationship with age, health, and survival probability
Although theories from economics and evolutionary biology predict that one’s age, health, and survival probability should be associated with one’s subjective discount rate (SDR), few studies have empirically tested for t...
Cognitive reflection predicts the acceptance of unfair ultimatum game offers
In the ultimatum game, one player proposes a split of money between him- or herself and another player, who can accept the offer (and both players keep the allocated money) or reject the offer (and both players get nothi...