A Theoretical Note on Assymmetries in Intensity and Persistence of Reciprocity in Labour Markets

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Abstract

This paper presents a model that can account for, and explain, two well documented empirical asymmetries characterising a worker's reciprocity: negative reciprocity is both stronger, and more persistent, than positive reciprocity. The stronger intensity of negative reciprocity is driven by the worker being loss averse; the longer persistence is driven by the slower adaptation of the worker to wage changes that are perceived as unfair.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-8
Number of pages9
Volume18
Publication statusPublished - 31 May 2018

Keywords

  • reciprocity
  • loss aversion
  • adaptation
  • asymmetries

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