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An experimental study of asymmetric reciprocity

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  • Al-Ubaydli, Omar
  • Lee, Min Sok

Abstract

When deviating from best responses, do people have a stronger propensity to increase or decrease other people's payoffs? Offerman (2002) finds that negative intentions are more likely to induce payoff decreases than positive intentions are to induce payoff increases. Using the Falk and Fischbacher (2006) model, we approach the same question as Offerman, but from a structural angle. This requires measuring what a subject predicts that other subjects predict that he will do (known as a subject's second-order expectations). This permits us to interpret any asymmetry in the propensities to increase and decrease payoffs in terms of the determinants of payoff increases and decreases. Our results are largely consonant with Offerman (2002). We also find that in situations with exogenously created inequity (rather than inequity that is the result of an intentional action by an actor), payoff increase is more likely to be used to diminish the inequity than is payoff decrease. Our results exhibit some sensitivity to whether we obtain second-order expectations by eliciting them directly from the subject making the payoff increase/decrease decision or by inducing them by reporting to the decider the expectations of the target of the payoff increase/decrease.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 72 (2009)
Issue (Month): 2 (November)
Pages: 738-749

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Handle: RePEc:eee:jeborg:v:72:y:2009:i:2:p:738-749

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Keywords: Reciprocity Reward Punishment;

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References

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Cited by:
  1. Brandes, Leif & Franck, Egon, 2012. "Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 925-939.
  2. Omar Al-Ubaydli & Min Sok Lee, 2009. "Do You Reward and Punish In The Way You Think Others Expect You To?," Working Papers 1014, George Mason University, Interdisciplinary Center for Economic Science.
  3. Li, Lingfang (Ivy) & Xiao, Erte, 2010. "Money Talks? An Experimental Study of Rebate in Reputation System Design," MPRA Paper 22401, University Library of Munich, Germany.

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