Authors
Ernst Fehr, Simon Gächter
Publication date
1998/5/31
Journal
European economic review
Volume
42
Issue
3-5
Pages
845-859
Publisher
North-Holland
Description
A large number of studies suggest that reciprocity constitutes a basic motivational drive. This paper shows that reciprocity can account for a wide range of empirical phenomena: It (1) is a powerful effort elicitation device, (2) explains why employers refuse to hire underbidders and, hence, why wages are downwardly rigid, (3) gives rise to non-compensating wage differentials and to a positive correlation between profits and wages, (4) provides a rationale for the absence of explicit financial incentives, and (5) is a key force that sustains social norms.
Total citations
Scholar articles
E Fehr, S Gächter - European economic review, 1998
E Fehr, S Gächter - Annual Conference EALE, 1999