Reciprocity and resistance to change: An experimental study

Many uncertain organizational changes fail because of resistance by employees. This paper studies the circumstances under which acceptance to change occurs. We propose that reciprocity towards the employer helps to increase change approval. Subjects in our experiment play a combination of a gift exchange and a threshold contribution game. In each group, one employer chooses a wage and then five employees decide on their effort. A 'reform' is adopted if the employees exert at least a minimum threshold of effort. The reform is efficiency enhancing but also raises inequality among employees. We find that uncertainty over payoffs does not necessarily lead to resistance. The likelihood of reform approval is especially high if the employer is able to trigger reciprocal behavior in employees by offering a fair wage, which confirms our hypothesis.