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Is There Reciprocity in a Reciprocal Exchange Economy? Evidence from a Slum in Nairobi, Kenya

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  • Greig, Fiona

    (Harvard U)

  • Bohnet, Iris

    (Harvard U)

Abstract

Norms of reciprocity contribute to the enforcement of cooperative agreements in bilateral sequential exchange. This paper examines the norms that apply in a reciprocal-exchange economy and what effect on trust, trustworthiness and efficiency they have. In our one-shot investment game experiments with Nairobi slum dwellers, people generally adhered to the norm of “balanced reciprocity”, which obligates quid-pro-quo returns for any level of trust. This norm differs from “conditional reciprocity,” prevalent in developed countries, according to which higher trust levels are rewarded with proportionally larger returns. Which norms prevail has implications for the gains from trade realized in bilateral exchange.

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Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp05-044.

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Date of creation: Jul 2005
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Handle: RePEc:ecl:harjfk:rwp05-044

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Cited by:
  1. Anthony Patt & Nicole Peterson & Michael Carter & Maria Velez & Ulrich Hess & Pablo Suarez, 2009. "Making index insurance attractive to farmers," Mitigation and Adaptation Strategies for Global Change, Springer, Springer, vol. 14(8), pages 737-753, December.
  2. Abigail Barr & Magnus Lindelow & Pieter Serneels & Jose Garcia-Motalvo, 2005. "Strategy choice and cognitive ability in field experiments," Framed Field Experiments 00113, The Field Experiments Website.
  3. Bohnet, Iris & Meier, Stephan, 2005. "Deciding to Distrust," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp05-049, Harvard University, John F. Kennedy School of Government.
  4. Nava Ashraf & Iris Bohnet & Nikita Piankov, 2006. "Decomposing trust and trustworthiness," Experimental Economics, Springer, Springer, vol. 9(3), pages 193-208, September.

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