Market conditions influence generosity in gift-exchange markets, impacting wages and productivity.
The researchers looked at how market conditions affect gift exchange in experimental markets. They tested if having too many firms or workers impacts how generous firms are with wages. They also studied the effect of setting a minimum wage on wages and productivity. The results showed that behavior didn't always follow traditional predictions, and the level of competition didn't have a strong effect. However, productivity decreased when a minimum wage was enforced. Even in short-term interactions, gift exchange still occurred.