What are Relevant Work Incentive Models? Shirking Model, Gift Exchange Model, or Reciprocity Model

This empirical study examines the relevance of different work incentive models by distinguishing reciprocity induced by pecuniary and non-pecuniary factors. Although the literature does not present an examination of different models all together but rather specifically examines each model mainly through experimental laboratory games, we study which models are suitable to explain work incentives in real labor markets. Our analyses reveal that overall reciprocity induced by non-pecuniary factors motivates employees well. The shirking model induces effort only if employees face a high level of vulnerability to firing. However, the high level of vulnerability to dismissal invalidates the gift exchange and reciprocity models. These results can complement controlled laboratory experiments, whose results are often restricted in applying to the reality. Copyright Springer Science+Business Media New York 2013