Gift-Exchange in the Field
Armin Falk*
University of Bonn, IZA, CEPR, CESifo, DIW Berlin
This version: January 2007
Abstract. This study reports evidence from a field experiment that was conducted to
investigate the relevance of gift-exchange in a natural setting. In collaboration with a
charitable organization we sent roughly 10,000 solicitation letters to potential donors.
One third of the letters contained no gift, one third contained a small gift and one
third contained a large gift. Treatment assignment was random. The results confirm
the economic importance of gift-exchange. Compared to the no gift condition, the
relative frequency of donations increased by 17 percent if a small gift was included
and by 75 percent for a large gift. The study extends the current body of research on
gift-exchange, which is almost exclusively confined to laboratory studies.
Keywords: gift-exchange, reciprocity
JEL-classification: C9, D63
* Address: Institute for the Study of Labor, P.O. Box 7240, D-53072 Bonn, Germany
Email: Falk@iza.org
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1. INTRODUCTION
Reciprocity often takes the form of a gift-exchange, i.e., the repayment of gifts (see,
e.g., Fehr and Gächter (2000)).1 In this paper we test this notion of reciprocity with
the help of a field experiment, which we conducted in collaboration with a charitable
organization. As part of their regular activities the organization sent out roughly
10,000 solicitation letters to potential donors. In order to study gift-exchange we
systematically manipulated the solicitation letters such that one third of the donors
received the letter without a gift (no gift condition), one third received the letter
together with a small gift (small gift condition) and one third received the letter
together with a large gift (large gift condition). Treatment conditions were assigned
randomly.
Our main results are consistent with the gift-exchange hypothesis: Compared to
the no gift condition, the rela