p.1501

Gift Exchange in the Field

Armin Falk

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.