Maximiano, S., Sloof, R. and Sonnemans, J. (2013). Gift exchange and the separation of ownership and control Games and Economic Behavior, 77(1):41--60.
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Affiliated authors
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Publication year2013
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JournalGames and Economic Behavior
Numerous gift-exchange experiments have found a positive wage-effort relationship. In (almost) all these experiments the employer both owns and controls the firm. This paper explores to what extent the separation of ownership and control affects the wage-effort relationship. We compare the standard bilateral gift-exchange game between an owner-manager and a worker with two trilateral ones where the firm is owned by a shareholder and controlled by a manager. The wage-effort relationship is similar in all three situations. Most strikingly, workers reward higher wages with higher effort, even when the manager does not share in the firmʼs profits.