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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.

Suggested Citation

  • Al-Ubaydli, Omar & Lee, Min Sok, 2009. "An experimental study of asymmetric reciprocity," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 738-749, November.
  • Handle: RePEc:eee:jeborg:v:72:y:2009:i:2:p:738-749
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    Cited by:

    1. 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.
    2. 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.
    3. Omar Al-Ubaydli & Uri Gneezy & Min Sok Lee & John A. List, 2010. "Towards an understanding of the relative strengths of positive and negative reciprocity," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 5(7), pages 524-539, December.
    4. Al-Ubaydli, Omar & Lee, Min Sok, 2012. "Do you reward and punish in the way you think others expect you to?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(3), pages 336-343.
    5. Pan, Xiaofei & Xiao, Erte, 2016. "It’s not just the thought that counts: An experimental study on the hidden cost of giving," Journal of Public Economics, Elsevier, vol. 138(C), pages 22-31.
    6. Adrian Bruhin & Ernst Fehr & Daniel Schunk, 2016. "The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences," Working Papers 1603, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz, revised 01 Feb 2016.

    More about this item

    Keywords

    Reciprocity Reward Punishment;

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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