# 16-045/VII (2016-06-06)

Author(s)
Christiane Bradler, ZEW Centre for European Economic Research, Mannheim, Germany; Susanne Neckermann, Erasmus University Rotterdam, the Netherlands, and ZEW Centre for European Economic Research, Mannheim, Germany
Keywords:
gift exchange, reciprocity, personnel economics, gratitude, personal touch, field experiment
JEL codes:
C93, M52

This paper makes use of two field experiments to explore individual effort responses to gifts. We extend the literature by looking at nonfinancial gifts and gifts that combine financial and nonfinancial elements with or without adding a ``personal touch.'' We find that non-pecuniary gifts that signal worker appreciation induce reciprocity. Most importantly, we find that there are interaction effects between money and appreciation. While money and appreciation are individually effective, they only work well together when they are combined with a personal touch. This points to the importance of interpersonal elements in gift giving and has important implications for how to effectively elicit worker effort.