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Committees and reciprocity

Listed author(s):
  • Hahn, Volker
  • Mühe, Felix

In this paper we examine the impact of reciprocal motives on decision-making in a committee. We show that each strategy profile that constitutes an equilibrium without reciprocity also represents an equilibrium under reciprocity. Under reciprocity, additional equilibria may exist. All of them imply lower material payoffs and lower overall utility for a large majority of members compared to equilibria that also represent equilibria without reciprocity. We discuss mechanisms such as incentive contracts that may eliminate the negative effects of reciprocity. In a dynamic framework we show that "psychological logrolling equilibria" may exist, where some agents perceive others as kind and therefore accept projects that are detrimental to themselves but beneficial to others.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165-4896(08)00105-4
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Article provided by Elsevier in its journal Mathematical Social Sciences.

Volume (Year): 57 (2009)
Issue (Month): 1 (January)
Pages: 26-47

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Handle: RePEc:eee:matsoc:v:57:y:2009:i:1:p:26-47
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505565

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  1. Ernst Fehr & Simon Gaechter, "undated". "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers 040, Institute for Empirical Research in Economics - University of Zurich.
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  4. Kiel, Alexandra & Gerling, Kerstin & Schulte, Elisabeth & Grüner, Hans Peter, 2003. "Information acquisition and decision making in committees: a survey," Working Paper Series 0256, European Central Bank.
  5. Falk, Armin & Fischbacher, Urs, 2001. "A Theory of Reciprocity," CEPR Discussion Papers 3014, C.E.P.R. Discussion Papers.
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  10. Volker Hahn, 2007. "Fairness and voting," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(4), pages 607-607, June.
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  13. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
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  15. Fong, Christina M. & Bowles, Samuel & Gintis, Herbert, 2006. "Strong reciprocity and the welfare state," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
  16. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
  17. Gersbach, Hans & Schneider, Maik T., 2012. "Tax contracts and elections," European Economic Review, Elsevier, vol. 56(7), pages 1461-1479.
  18. Geanakoplos, John & Pearce, David & Stacchetti, Ennio, 1989. "Psychological games and sequential rationality," Games and Economic Behavior, Elsevier, vol. 1(1), pages 60-79, March.
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  21. Hahn, Volker, 2009. "Reciprocity and voting," Games and Economic Behavior, Elsevier, vol. 67(2), pages 467-480, November.
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