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Fairness and Retaliation: The Economics of Reciprocity Author info | Abstract | Publisher info | Download info | Related research | Statistics Ernst Fehr
Simon Gachter
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This paper shows that reciprocity has powerful implications for many economic domains. It is an important determinant in the enforcement of contracts and social norms and enhances the possibilities of collective action greatly. Reciprocity may render the provision of explicit incentive inefficient because the incentives may crowd out voluntary co-operation. It strongly limits the effects of competition in markets with incomplete contracts and gives rise to noncompetitive wage differences. Finally, reciprocity it is also a strong force contributing to the existence of incomplete contracts.
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Article provided by American Economic Association in its journal Journal of Economic Perspectives .
Volume (Year): 14 (2000)
Issue (Month): 3 (Summer)
Pages: 159-181
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Handle: RePEc:aea:jecper:v:14:y:2000:i:3:p:159-181Contact details of provider: Email: Web page: http://www.aeaweb.org/jep/ More information through EDIRC
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