Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22872
Authors: 
Hennig-Schmidt, Heike
Rockenbach, Bettina
Sadrieh, Abdolkarim
Year of Publication: 
2003
Series/Report no.: 
Bonn econ discussion papers 2003,24
Abstract: 
Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower – or absent – when the information is incomplete. We report a laboratory experiment with symmetric and asymmetric incomplete surplus information in a ?bilateral gift exchange? setting. We find that trust and reciprocity have a significant positive effect on wages, effort and efficiency. But, all three are substantially lower under incomplete than under complete information. The negative impact on wages and efficiency is even greater with information asymmetry.
Subjects: 
trust
reciprocity
efficiency
incomplete information
asymmetric information
JEL: 
D82
C92
J41
Document Type: 
Working Paper

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