Search
Program Calendar
Browse By Day
Search Tips
Virtual Exhibit Hall
Personal Schedule
Sign In
This study examines whether agents engage in self-licensing behavior and whether this licensing behavior persists in incomplete contracts when employers engage in gift-exchange. We use moral licensing to predict that employees who are responsible for a reporting function in addition exert effort to perform a task will provide more effort than an employee who is only responsible for exerting effort and has no reporting responsibility. When the employer has discretion over the wage, we predict that lower wages will lead to lower effort and greater misreporting by agents due to negative reciprocity. Regarding the case of higher wages offered by the employer, we predict higher effort from employers, but we remain agnostic over the level of reporting and explore this in a research question. If the gift-exchange effect is sufficiently strong, the agent will engage in positive reciprocity in both tasks by reporting more honestly and providing more effort than when the wage is exogenously determined. If the gift-exchange effect is not sufficiently strong, the agent will reciprocate the generous wage by providing more effort which will license the agent to engage in more opportunistic reporting behavior. The theoretical and practical implication of this study will be discussed.