You Owe Me
Ulrike Malmendier, Klaus Schmidt
In many cultures and industries gifts are given in order to influence
the recipient, often at the expense of a third party. Examples include
business gifts of firms and lobbyists. In a series of experiments, we
show that, even without incentive or informational effects, small gifts
strongly influence the recipient’s behavior in favor of the gift giver,
in particular when a third party bears the cost. Subjects are well aware
that the gift is given to influence their behavior but reciprocate
nevertheless. Withholding the gift triggers a strong negative response.
These findings are inconsistent with the most prominent models of social
preferences. We propose an extension of existing theories to capture
the observed behavior by endogenizing the “reference group” to whom
social preferences are applied. We also show that disclosure and size
limits are not effective in reducing the effect of gifts, consistent
with our model. Financial incentives ameliorate the effect of the gift
but backfire when available but not provided.
2 comments:
That "small gifts strongly influence ...in particular when a third party bears the cost" shows the full pathology of the problem.
By the same rule, when your small gift is declined by the other party, you know negotiations will be rough.
When the cops grab you and want to "ask a few questions", they might offer you coffee or Coke. Decline.
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