Department/School

Marketing

Date of this version

2004

Document Type

Article

Keywords

Monetary markets, Social markets, Mixed markets, Relational theory

Abstract

The standard model of labor is one in which individuals trade their time and energy in return for monetary rewards. Building on Fiske’s relational theory (1992), we propose that there are two types of markets that determine relationships between effort and payment: monetary and social. We hypothesize that monetary markets are highly sensitive to the magnitude of compensation, whereas social markets are not. This perspective can shed light on the well-established observation that people sometimes expend more effort in exchange for no payment (a social market) than they expend when they receive low payment (a monetary market). Three experiments support these ideas. The experimental evidence also demonstrates that mixed markets (markets that include aspects of both social and monetary markets) more closely resemble monetary than social markets.

Published in

Psychological Science

Citation/Other Information

Heyman, James, and Dan Ariely. “Effort for payment. A tale of two markets.” Psychological Science 15.11 (2004) : 787-793.