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Rethinking Reciprocity

Author

Listed:
  • Ulrike Malmendier

    () (Department of Economics, University of California, Berkeley, California 94720)

  • Vera L. te Velde

    (Department of Economics, University of California, Berkeley, California 94720)

  • Roberto A. Weber

    (Department of Economics, University of Zurich, Zurich CH-8006, Switzerland)

Abstract

Reciprocal behavioral has been found to play a significant role in many economic domains, including labor supply, tax compliance, voting behavior, and fund-raising. What explains individuals’ tendency to respond to the kindness of others? Existing theories posit internal preferences for the welfare of others, inequality aversion, or utility from repaying others’ kindness. However, recent evidence on the determinants of (unilateral) sharing decisions suggests that external factors such as social pressure are equally important. So far, this second wave of social preference theories has had little spillover to two-sided reciprocity environments, in which one individual responds to the actions of another. We present a novel laboratory reciprocity experiment (the double-dictator game with sorting) and show that failure to account for external motives leads to a significant overestimation of internal motives such as fairness and altruism. The experimental data illustrate the importance of combining reduced-form and structural analyses to disentangle internal and external determinants of prosocial behavior.

Suggested Citation

  • Ulrike Malmendier & Vera L. te Velde & Roberto A. Weber, 2014. "Rethinking Reciprocity," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 849-874, August.
  • Handle: RePEc:anr:reveco:v:6:y:2014:p:849-874
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080213-041312
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    Citations

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    Cited by:

    1. Topi Miettinen & Michael Kosfeld & Ernst Fehr & Jörgen W. Weibull, 2017. "Revealed Preferences in a Sequential Prisoners' Dilemma: A Horse-Race Between Six Utility Functions," CESifo Working Paper Series 6358, CESifo Group Munich.
    2. Kriss, Peter H. & Weber, Roberto A. & Xiao, Erte, 2016. "Turning a blind eye, but not the other cheek: On the robustness of costly punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 159-177.
    3. Gary E. Bolton & David J. Kusterer & Johannes Mans, 2015. "Inflated reputations: Uncertainty, leniency & moral wiggle room in trader feedback systems," Cologne Graduate School Working Paper Series 06-04, Cologne Graduate School in Management, Economics and Social Sciences, revised 29 Jul 2016.
    4. te Velde, Vera L., 2018. "Beliefs-based altruism as an alternative explanation for social signaling behaviors," Journal of Economic Behavior & Organization, Elsevier, vol. 152(C), pages 177-191.
    5. Tobias Regner & Astrid Matthey, 2017. "Actions and the self: I give, therefore I am?," Jena Economic Research Papers 2017-018, Friedrich-Schiller-University Jena.
    6. Ellingsen, Tore & Mohlin, Erik, 2019. "Decency," Working Papers 2019:3, Lund University, Department of Economics.
    7. Dickson, Alex & Fongoni, Marco, 2019. "Asymmetric reference-dependent reciprocity, downward wage rigidity, and the employment contract," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 409-429.
    8. Breitmoser, Yves & Vorjohann, Pauline, 2018. "Welfare-Based Altruism," Rationality and Competition Discussion Paper Series 89, CRC TRR 190 Rationality and Competition.
    9. Tobias Regner & Astrid Matthey, 2015. "Do reciprocators exploit or resist moral wiggle room? An experimental analysis," Jena Economic Research Papers 2015-027, Friedrich-Schiller-University Jena.
    10. Bulte, Erwin & Wang, Ruixin & Zhang, Xiaobo, 2018. "Forced gifts: The burden of being a friend," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 79-98.
    11. Hanyeong Kim & Yun Shin Lee & Kun Soo Park, 2018. "The Psychology of Queuing for Self-Service: Reciprocity and Social Pressure," Administrative Sciences, MDPI, Open Access Journal, vol. 8(4), pages 1-15, November.
    12. Davide Proserpio & Wendy Xu & Georgios Zervas, 2018. "You get what you give: theory and evidence of reciprocity in the sharing economy," Quantitative Marketing and Economics (QME), Springer, vol. 16(4), pages 371-407, December.
    13. Tobias Regner, 2018. "Reciprocity under moral wiggle room: Is it a preference or a constraint?," Experimental Economics, Springer;Economic Science Association, vol. 21(4), pages 779-792, December.
    14. Ulrike Malmendier, 2018. "Behavioral Corporate Finance," NBER Working Papers 25162, National Bureau of Economic Research, Inc.
    15. Martina Pieperhoff, 2018. "Reziprozität in interorganisationalen Austauschbeziehungen - eine Typologisierung," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 66(4), pages 273-287.

    More about this item

    Keywords

    social preferences; social pressure; social image; external and internal motivations; structural estimation; double-dictator game;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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