We investigate the role of respect and monetary gifts in the service industry. We report findings from purchases of more than 800 doner durum, a common lunch snack. Prior to the food’s preparation, we either give a compliment about the product, or a monetary gift by tipping. We repeat the...

Empirical work on Akerlof’s theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort,...