Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107547
Authors: 
Kleine, Marco
Kube, Sebastian
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8762
Abstract: 
We study how upward communication – from workers to managers – about individual efforts affects the effectiveness of gift exchange as a contract-enforcement device for work teams. Our findings suggest that the use of such self-assessments can be detrimental to workers' performance. In the controlled environment of a laboratory gift-exchange experiment, our workers regularly overstate their own contribution to the joint team output. Misreporting seems to spread distrust within the team of workers, as well as between managers and workers. This manifests itself in managers being less generous with workers' payments, and in workers being more sensitive to the perceived kindness of their relative wage payments. By varying the source and degree of information about individual efforts between treatments, we see that precise knowledge about workers' actual contributions to the team output is beneficial for the success of gift-exchange relationships. Yet, workers' self-assessments can be a problematic tool to gather this information.
Subjects: 
communication
gift exchange
incomplete contracts
reciprocity
performance appraisal
self-assessment
work team
laboratory experiment
JEL: 
C92
J33
M52
Document Type: 
Working Paper

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