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Hidden persuaders: do small gifts lubricate business negotiations?


Maréchal, Michel; Thöni, Christian (2018). Hidden persuaders: do small gifts lubricate business negotiations? Working paper series / Department of Economics 227, University of Zurich.

Abstract

Gift-giving customs are ubiquitous in social, political, and business life. Legal regulation and industry guidelines for gifts are often based on the assumption that large gifts potentially influence behavior and create conflicts of interest, but small gifts do not. However, scientific evidence on the impact of small gifts on business relationships is scarce. We conducted a natural field experiment in collaboration with sales agents of a multinational consumer products company to study the influence of small gifts on the outcome of business negotiations. We find that small gifts matter. On average, sales representatives generate more than twice as much revenue when they distribute a small gift at the onset of their negotiations. However, we also find that small gifts tend to be counterproductive when purchasing and sales agents meet for the first time, suggesting that the nature of the business relationship crucially affects the profitability of gifts.

Abstract

Gift-giving customs are ubiquitous in social, political, and business life. Legal regulation and industry guidelines for gifts are often based on the assumption that large gifts potentially influence behavior and create conflicts of interest, but small gifts do not. However, scientific evidence on the impact of small gifts on business relationships is scarce. We conducted a natural field experiment in collaboration with sales agents of a multinational consumer products company to study the influence of small gifts on the outcome of business negotiations. We find that small gifts matter. On average, sales representatives generate more than twice as much revenue when they distribute a small gift at the onset of their negotiations. However, we also find that small gifts tend to be counterproductive when purchasing and sales agents meet for the first time, suggesting that the nature of the business relationship crucially affects the profitability of gifts.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:D63, C93
Uncontrolled Keywords:Reciprocity, gift exchange, field experiment, negotiations, Geschenk, Verkäufer, Verkaufswettbewerb, Gegenseitigkeit, Experiment, Konsumgut
Language:English
Date:May 2018
Deposited On:04 May 2016 14:52
Last Modified:16 Oct 2018 03:11
Series Name:Working paper series / Department of Economics
Number of Pages:27
ISSN:1664-7041
Additional Information:Revised version
OA Status:Green
Official URL:http://www.econ.uzh.ch/static/wp/econwp227.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers-new.php

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