Research Article


DOI :10.26650/ISTJECON2021-1181635   IUP :10.26650/ISTJECON2021-1181635    Full Text (PDF)

The Effect of Gift Exchange Theory on Wage Determination

Muhammed Enes ŞaşmazErdem Cam

The disciplines of psychology and economics have interacted over time due to their human-oriented approach and have started forming the discipline of behavioral economics since the 1950s. Labor economics examines the decisions of workers and employers regarding repeated human interactions and has also been affected by the development of behavioral economics. This discipline was recently defined as behavioral labor economics and has increased its awareness in recent years as a field where more multidisciplinary, innovative, and experimental methods are preferred, unlike traditional labor economics with its neoclassical and conservative characteristics. Behavioral labor economics discusses labor market aspects such as labor supply, effort, wages, and other behavioral factors in the workplace. Gift exchange theory provides insight into the many variables related to behavioral labor economics. According to the theory, receiving a wage level higher than the equilibrium market wage indicates a gift for employees, with employees being expected to work harder in exchange for this gift. This experimental study has been prepared based on gift exchange practices in which employees receive a wage above the one they accepted in way where it is considered a gift. As a result of the experiment, the gift exchange determined to be effective in the experimental group, and this level of effectiveness continued to increase over time.

JEL Classification : J31 , J41 , C39 , D51
DOI :10.26650/ISTJECON2021-1181635   IUP :10.26650/ISTJECON2021-1181635    Full Text (PDF)

Ücretlerin Belirlenmesi Sürecinde Hediye Değişimi Teorisinin Etkisi Üzerine Bir Araştırma

Muhammed Enes ŞaşmazErdem Cam

Psikoloji ve iktisat disiplinleri insanı odak alması nedeniyle zaman içerisinde ortak konularla ilgilenmiş ve 1950’li yıllardan itibaren davranışsal iktisat bilimimi doğmaya başlamıştır. Bu süreçte işçi ve işveren ilişkilerini iktisadi açıdan inceleyen çalışma ekonomisi disiplini de davranışsal iktisadın gelişmesinden payını almıştır. Günümüzde davranışsal çalışma ekonomisi olarak tanımlanan bu disiplin, neo-klasik ve muhafazakâr nitelikleri olan geleneksel çalışma ekonomisinin aksine daha multi-disipliner, yenilikçi ve deneysel yöntemlerin tercih edildiği bir alandır. Davranışsal çalışma ekonomisi özellikle işgücü piyasalarının temel değişkenleri olan; işgücü arzı, çaba, ücret ve işyerindeki davranışsal faktörleri konu edinmektedir. Hediye değişimi teorisi, bu bağlamda davranışsal çalışma ekonomisinin konu edindiği birçok değişken üzerinden bir bakış açısı ortaya koymaktadır. Teoriye göre piyasadaki denge ücret düzeyinden yüksek bir ücret seviyesi, çalışan için bir hediye anlamına gelmekte buna karşın çalışanların da bu hediyeyi takas etmek amacıyla daha yüksek bir çaba sergilemektedir. Bu makalede, çalışanların çalışmayı kabul ettikleri ücret düzeyinin üzerindeki bir ücretin hediye niteliği taşıyacak bir biçimde ödendiği hediye değişimi uygulamalarından yola çıkılarak hazırlanmıştır. Bu doğrultuda deney ve kontrol grubu olarak ayrılan katılımcılar üzerinden ücret değişkeni kullanılarak test edilen hediye değişiminin, çalışan çabasına etkisinin ölçülmesi ve bu etkinin zamansal bağlamdaki durumunun tespit edilmesi amaçlanmıştır. Deney sonucunda hediye değişiminin deney grubu üzerinde etkin olduğu ve bu etkinliğin zaman içerisinde artarak sürdüğü tespit edilmiştir. 

JEL Classification : J31 , J41 , C39 , D51

EXTENDED ABSTRACT


Behavioral economics explains how economic decision-making is influenced by mental, emotional, and social biases. The discipline of labor economics studies the decisions of workers and employers regarding repeated human interactions and has also been influenced by the development of behavioral economics. This interaction has become the discipline known as behavioral labor economics in the last two decades and helps to explain the observed behavior of workers and employers. Traditional labor economics theories have been tested in behavioral labor economics, with new theories having been developed, and tools having emerged that contribute to the literature for the design and evaluation of labor economics policies using behavioral theories and experimental methods together. 

The wage and wage-effort relationship has been one of the main issues in labor economics, economics, and other business disciplines, and various solutions have been sought for this issue under the heading of wage theories since the 20th century. Gift exchange theory is an efficiency wage theory model, according to which a wage level higher than the equilibrium wage level in the market is considered a gift for the employee, and employees in turn put forth greater effort in exchange for this gift. Nowadays, gift exchange theory explains how all kinds of factors affecting employee psychology, working rules, other workers’ wages, unemployment insurance, unemployment levels, and reference wages are important in determining efficiency wages. In this context, the theory offers a new and different perspective to wage theories.

The aim of this study is to interpret gift exchange theory using behavioral labor economics arguments and to measure the effect of a psychologically perceived gift on effort behaviors in the employer-employee relationship. For this purpose, the effect of an extra wage that was given as a gift exceeding the participants’ expected wage level was examined with regard to experimental and control groups. The difference in effort levels between the groups was first measured, followed by the change of this difference over time. This experiment uses the method of field experiments to test the effectiveness of gift exchange theory. Within the scope of the experiment, the control and experimental groups each had 10 participants. The participants were sent information about the books in a file and asked to record this information in the library system. The participants were informed that they would earn 100 virtual coins if they recorded the data from the book that they’d been sent onto the system completely and sequentially for three sessions. Prior to starting the study, the participants in the control group were also told that they would be given 100 virtual coins in thanks for participating in the study voluntarily. The participants in the experimental group were also thanked for participating in the study voluntarily, and in this context, they were given 50 more virtual coins as a gift and then informed that they would receive a total of 150 virtual coins at the end of the study. 

The Mann-Whitney U test was applied to measure the effects of the gift exchange that occurred between the control and experimental groups in the total hour and for each hour. According to the test results, the significance value for the full hour was p = 0,000, which satisfies the p < 0,05 condition. Thus, the difference between the experimental and control groups was determined to be statistically significant. The change in the number of books recorded in the system by both groups over time was examined by applying the Friedman Test. First, the change in the number of books in the control group per hour entered into the system was not statistically significant (p = 0,497 > 0,05). Next, the change in the number of books recorded in the system in the experimental group per hour was measured, and this change was statistically significant (p = 0,00 < 0,05). For this reason, the two-way Friedman Test was applied to measure the significance of the difference. According to the results from this test, the difference between the first and second hour in the experimental group (p = 0,371 > 0,05) was not statistically significant, while the difference between the first and third hour (p = 0,00 < 0,05) and between the second and third hour (p = 0,004 < 0,05) in the experimental group were statistically significant. 

Further contributions to the literature can be made by comparing the ratio of the nominal gift given in addition to the wage and the change in effort levels. To achieve a more realistic result, gift exchange should be measured by preparing a longer-term experiment plan rather than a one-time three-hour study, thus the sustainability of gift exchange in labor markets can be examined in this way. In addition, the one-time fee paid in the study may be perceived as additional income by the participants. Instead, a field study conducted directly on employee salaries may provide different results. 


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APA

Şaşmaz, M.E., & Cam, E. (2022). The Effect of Gift Exchange Theory on Wage Determination. Istanbul Journal of Economics, 72(2), 939-974. https://doi.org/10.26650/ISTJECON2021-1181635


AMA

Şaşmaz M E, Cam E. The Effect of Gift Exchange Theory on Wage Determination. Istanbul Journal of Economics. 2022;72(2):939-974. https://doi.org/10.26650/ISTJECON2021-1181635


ABNT

Şaşmaz, M.E.; Cam, E. The Effect of Gift Exchange Theory on Wage Determination. Istanbul Journal of Economics, [Publisher Location], v. 72, n. 2, p. 939-974, 2022.


Chicago: Author-Date Style

Şaşmaz, Muhammed Enes, and Erdem Cam. 2022. “The Effect of Gift Exchange Theory on Wage Determination.” Istanbul Journal of Economics 72, no. 2: 939-974. https://doi.org/10.26650/ISTJECON2021-1181635


Chicago: Humanities Style

Şaşmaz, Muhammed Enes, and Erdem Cam. The Effect of Gift Exchange Theory on Wage Determination.” Istanbul Journal of Economics 72, no. 2 (Mar. 2023): 939-974. https://doi.org/10.26650/ISTJECON2021-1181635


Harvard: Australian Style

Şaşmaz, ME & Cam, E 2022, 'The Effect of Gift Exchange Theory on Wage Determination', Istanbul Journal of Economics, vol. 72, no. 2, pp. 939-974, viewed 28 Mar. 2023, https://doi.org/10.26650/ISTJECON2021-1181635


Harvard: Author-Date Style

Şaşmaz, M.E. and Cam, E. (2022) ‘The Effect of Gift Exchange Theory on Wage Determination’, Istanbul Journal of Economics, 72(2), pp. 939-974. https://doi.org/10.26650/ISTJECON2021-1181635 (28 Mar. 2023).


MLA

Şaşmaz, Muhammed Enes, and Erdem Cam. The Effect of Gift Exchange Theory on Wage Determination.” Istanbul Journal of Economics, vol. 72, no. 2, 2022, pp. 939-974. [Database Container], https://doi.org/10.26650/ISTJECON2021-1181635


Vancouver

Şaşmaz ME, Cam E. The Effect of Gift Exchange Theory on Wage Determination. Istanbul Journal of Economics [Internet]. 28 Mar. 2023 [cited 28 Mar. 2023];72(2):939-974. Available from: https://doi.org/10.26650/ISTJECON2021-1181635 doi: 10.26650/ISTJECON2021-1181635


ISNAD

Şaşmaz, MuhammedEnes - Cam, Erdem. The Effect of Gift Exchange Theory on Wage Determination”. Istanbul Journal of Economics 72/2 (Mar. 2023): 939-974. https://doi.org/10.26650/ISTJECON2021-1181635



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Submitted28.09.2022
Accepted22.11.2022
Published Online05.01.2023

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