We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Reciprocity in Dynamic Employment Relationships.
- Authors
Fahn, Matthias
- Abstract
This paper analyzes a dynamic relational contract for employees with reciprocal preferences. A model of a long-term employment relationship is developed that implies that generous upfront wages activate the norm of reciprocity and then are more important when an employee is close to retirement. In earlier stages, direct incentives promising a bonus in exchange for effort are more effective. Hence, direct and reciprocity-based incentives reinforce each other and should be used in combination. Moreover, a more competitive labor market may increase the utilization of reciprocity-based incentives. This paper was accepted by Axel Ockenfels, behavioral economics and decision analysis. Funding: This work was supported by Hardegg'sche Stiftung, the Deutsche Forschungsgemeinschaft [CRC TRR 190], and the Austrian Science Fund [Grant P 33307-G]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/mnsc.2022.4657.
- Subjects
DEUTSCHE Forschungsgemeinschaft; INDUSTRIAL relations; RECIPROCITY (Psychology); RECIPROCITY (Commerce); BEHAVIORAL economics; DECISION making; LABOR market
- Publication
Management Science, 2023, Vol 69, Issue 10, p5816
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.2022.4657