Profit Sharing and Reciprocity: Theory and Survey Evidence

摘要: The 1/n problem potentially limits the effectiveness of profit sharing in motivating workers. While economic literature suggests that reciprocity can mitigate this problem, it remains silent on optimal degree reciprocity. We present a representative model demonstrating may increase productive effort but also unproductive such as socializing job. implies increases up to point decreases beyond point. Using detailed survey measures worker reciprocity, we show probability receiving takes an inverse U-shape increases. This supports general implication and is shown exist for both positive negative remain when series ability proxies industry indicators are included.