Responsibility and Effort in an Experimental Labor Market

Previous indirect evidence suggests that impulses towards pro-social behavior are diminished when an external authority is responsible for an outcome. The responsibility-alleviation effect states that a shift of responsibility to an external authority dampens internal impulses toward honesty, loyalty, or generosity. In a gift-exchange experiment, we find that subjects respond with more generosity (higher effort) when a wage is determined by a random process than when it is assigned by a third party, indicating that even a slight shift in perceived responsibility for the final payoffs can change behavior. Responsibility-alleviation is a factor in economic environments featuring substantial personal interaction