Giving and Promising Gifts: Experimental Evidence on Reciprocity from the Field

In this study, we consider how gift-exchange and bonus systems function in a natural field setting by measuring the effort response of participants to non-monetary gifts over time. Our field experiment tests the difference in effort response to unconditional gifts delivered immediately, promised unconditional gifts delivered later, and conditional gifts linked to reaching a specific performance target. We find important benefits from promising to give an unconditional gift later: participants respond positively to a promised gift twice by increasing effort when the gift is promised and again when it is received. A promised gift outperforms both the unconditional gift delivered immediately, which leads to a single positive response, and the conditional gift based on performance, which does not trigger any significant behavioural change after the gift is delivered. The study lends insights into the relative effectiveness of gift-exchange and bonus systems and the temporal structure of reciprocal exchange.