Document Type
Article
Publication Date
10-2019
Abstract
We extend Akerlof’s (1982) gift-exchange model to the case in which reference wages respond to changes in the work environment such as those related to unemployment benefits or workers’ productivity levels. Our model shows that these changes spur disagreements between workers and employers regarding the value of the reference wage. These disagreements tend to weaken the gift-exchange relationship thus reducing production levels and wages. We find support for these predictions in a controlled, yet realistic, workplace environment. Our work also sheds light on several stylized facts regarding employment relationships such as the increased intensity of labor conflicts when economic conditions are unstable.
Recommended Citation
Bejarano, H., Corgnet, B., & Gómez-Miñambres, J. (2019). Labor contracts, gift-exchange and reference wages: Your gift need not be mine! ESI Working Paper 19-26. https://digitalcommons.chapman.edu/esi_working_papers/286/
Comments
ESI Working Paper 19-26
This paper later underwent peer review and was published as:
Bejarano, H., Corgnet, B., & Gómez-Miñambres, J. (2021). Economic stability promotes gift-exchange in the workplace. Journal of Economic Behavior & Organization, 187, 374-398. https://doi.org/10.1016/j.jebo.2021.04.033