The Magic of the Personal Touch: Field Experimental Evidence on Money and Appreciation as Gifts*

• DOI: http://doi.org/10.1111/sjoe.12310
• Author: Susanne Neckermann,Christiane Bradler
• Published date: 01 July 2019
• Date: 01 July 2019

Scand. J. of Economics 121(3), 1189–1221, 2019

DOI: 10.1111/sjoe.12310

The Magic of the Personal Touch: Field

Experimental Evidence on Money and

Appreciation as Gifts*

Christiane Bradler

Volkswagen, DE-38440 Wolfsburg,Germany

christianebradler@yahoo.de

Susanne Neckermann

University of Chicago, Chicago IL 60615, USA

sneckermann@uchicago.edu

Abstract

In this paper, we use two field experiments in professional settings to explore the effort levels

of individuals in response to gifts. We extend the literature by looking at non-financial gifts that

signal worker appreciation and gifts that combine financial and non-financial elements with or

without a personal touch. Wefind that while money and appreciation are individually effective,

these only work welltogether when they are combined with a personal touch. This suggests that

responses to gifts are sensitive to the presentation of the gift as well as to interpersonal elements;

these are factors that have so far been largely ignored in the literature but are easy to incorporate

into existing principal–agent models.

Keywords: Field experiment; gift exchange; gratitude; personnel economics; reciprocity

JEL classification:C93; M52

I. Introduction

The giving of gifts is a widespread phenomenon, not only in social

settings, but also in the professional realm. Many firms, for instance, use

gifts as a means of reinforcing their relationships with their clients and

employees. While gifts can serve many purposes, one objective of gift

giving, which is especially common in corporate settings, is the elicitation

of reciprocity.1

*We gratefully acknowledge comments and suggestions by numerous seminar and conference

participants. Special thanks go to Michael Kosfeld, Steve Levitt, John List, and Nick Zubanov.

We thank Ann-Kathrin Koessler, Graham Tierney, MattieToma, and Jeannine van Reeken for

excellent research assistance.

1Mauss (1954) was the first to systematicallydocument the role of gifts for establishing reciprocal

relationships.

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The editors of The Scandinavian Journal of Economics 2018.

1190 Field experimental evidence on money and appreciation as gifts

Gifts utilized by businesses can take many different forms. Some gifts

are purely financial, such as a year-end bonus, a rebate, or above market-

clearing wages. Other gifts (e.g., a thank you card or a pat on the back) have

no financial component. In many cases, gifts have both a financial and a

non-financial component (for instance, an expression of worker appreciation

accompanied by a financial gift).

When gifts include both financial and non-financial elements, these

two components can be combined in more or less thoughtful ways, where

thoughtfulness can, for example, be conveyed by adding a personal touch.

Consider a supervisor seeking to express her appreciation for her workers

by giving them a financial gift. One approach would be to send a mass

e-mail to all employees expressing her appreciation and noting that a bonus

will be included in the upcoming paycheck. Another approach would be to

write a series of personalized emails that convey this message. Alternatively,

she could take the time to stop by each employee’s desk, put a hand

on the employee’s shoulder, and deliver a heartfelt speech of appreciation

while handing the employee a check in an envelope with a hand-written

message.

Although few people would dispute that the way in which a gift

is presented affects the reaction of the receiver, the existing literature

– outlined below – has so far largely ignored non-financial gifts and

interpersonal elements (e.g., a personal touch) in gift giving. Instead,

it has mainly focused on financial gifts (cash transfers). This is not

surprising as cash is the most clear-cut and clean way of bestowing a

benefit on a recipient. The study of non-financial gifts and interpersonal

elements, by comparison, is inherently complicated because the particular

form of any non-pecuniary gift and any personal element can always

be criticized as context-specific, which might render any effect found as

less generalizable than any effect found in response to money. While we

recognize these inherent difficulties associated with moving away from

financial gifts, the prevalence and importance of non-financial gifts and

personal elements in real-world gift giving show the importance of studying

them.

We use two field experiments in professional settings to explore the

extent to which financial and non-financial gifts, and their combinations

with and without a personal touch, elicit reciprocity from the recipients.

We use cash as a financial reward and convey gratitude and appreciation

(the non-financial gift) via a thank you card.2We combine the financial and

the non-financial gift in two different ways: one that requires a significant

2While wedo not think that a tangible object is necessary to convey gratitude and appreciation, we

opted for a tangible object in order to make the non-financial gift more salient and meaningful.

This is in keeping with the literature on non-financial awards where researchers often confer

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The editors of The Scandinavian Journal of Economics 2018.

C. Bradler and S. Neckermann 1191

investment of time and effort (the gift has a personal touch) and one that

requires little investment of time and effort (the gift does not have – or

has less of – a personal touch). In both experiment, we use a handmade

element as a personal touch.3

In the first experiment, Experiment 1, we hired more than 380 workers

for a three-hour data-entry job. Workers were paid a flat wage of 25

euros and were not aware that they were taking part in an experiment.

The task consisted of manually entering surveys into a database. After

the workers worked for roughly 100 minutes, the treatment intervention

took place. Depending on the treatment, the workers received no gift,

a monetary gift (5 euros), a thank you card, or both the monetary gift

and thank you card, either with or without a handmade element. The

handmade element consisted of money folded like a bow tie and attached

to the card. After the treatment intervention, workers worked for another

hour.

The results show that both the monetary gift as well as the thank

you card alone significantly increased the performance of the workers,

compared with workers who did not receive a gift. These effect sizes are not

significantly different from one another, and thus suggest that a thank you

card and a 5 euro gift are equally effective in this setting. Interestingly,

however, the combination of 5 euros and the thank you card without a

handmade element does not increase performance, while the combination

with a handmade element is very effective (the effect size is roughly double

the effect size of the 5 euros and thank you card alone). The results suggest

that the combination of money and gratitude only works when the giver

adds a personal touch to the gift.

To test the robustness of these results and to investigate the underlying

mechanism, we designed a second field experiment, Experiment 2, using a

different setting and a non-student subject pool. We sent out 1,570 letters

asking recipients to fill out and return a 10-minute survey. Depending on

the treatment, the letter either contained a monetary gift, a combination

of a monetary gift and a thank you card without a personal touch, or a

combination of the two with a personal touch. This replicates our three

main treatments from Experiment 1.4The handmade element consisted

of a hand-drawn sketch of a flower on the thank you card. The outcome

tokens, such as certificates or trophies, on to award winners to symbolize their achievements,

making sure that the tokens themselves have no value or meaning; for example, Kosfeld and

Neckermann (2011) used a certificate, Ashraf et al. (2014) used a congratulator y letter from the

minister of health, and Levitt et al. (2016) used a trophy.

3Please refer to Section II for a definition and discussion of what constitutes a personal touch.

4Toincrease statistical power, we limited the set of main treatments to the twocombinations with

and without a personal touch and a reference treatment, money alone (1 euro, approx. US$1.1).

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The editors of The Scandinavian Journal of Economics 2018.