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Reciprocity and Social Order: What Do Experiments Tell us About the Failure of Economic Growth?

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  • Kevin McCabe

Abstract

This paper makes three observations for policy-makers, interested in promoting economic growth, based on the experimental work done at the Interdisciplinary Center for Economic Science. First, safeguards must be put into place to protect impersonal exchange from our innate desire for personal exchange. Second, policy must take into account the heterogeneity of individual cognitive strategies that are observed in economics laboratories. Third, policy must be test-bedded in economic experiments where the status quo is modeled as an ecologically rational response to the economic environment and the proposed policy change occurs in an environment where individuals have access to a full repertoire of personal exchange behaviors. Copyright Springer Science + Business Media, Inc. 2005

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  • Kevin McCabe, 2005. "Reciprocity and Social Order: What Do Experiments Tell us About the Failure of Economic Growth?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 18(3), pages 241-280, December.
    • Handle: RePEc:kap:revaec:v:18:y:2005:i:3:p:241-280
    DOI: 10.1007/s11138-005-3111-2
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    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. Vernon L. Smith, 1965. "Experimental Auction Markets and the Walrasian Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 73(4), pages 387-387.
    3. McCabe, Kevin A & Rassenti, Stephen J & Smith, Vernon L, 1992. "Designing Call Auction Institutions: Is Double Dutch the Best?," Economic Journal, Royal Economic Society, vol. 102(410), pages 9-23, January.
    4. Forsythe Robert & Horowitz Joel L. & Savin N. E. & Sefton Martin, 1994. "Fairness in Simple Bargaining Experiments," Games and Economic Behavior, Elsevier, vol. 6(3), pages 347-369, May.
    5. Vernon L. Smith, 1998. "The Two Faces of Adam Smith," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 2-19, July.
    6. repec:ucp:bkecon:9780226320670 is not listed on IDEAS
    7. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    8. Hoffman, Elizabeth & McCabe, Kevin A & Smith, Vernon L, 1998. "Behavioral Foundations of Reciprocity: Experimental Economics and Evolutionary Psychology," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 335-352, July.
    9. McCabe, Kevin A. & Rassenti, Stephen J. & Smith, Vernon L., 1998. "Reciprocity, Trust, and Payoff Privacy in Extensive Form Bargaining," Games and Economic Behavior, Elsevier, vol. 24(1-2), pages 10-24, July.
    10. Hayek, F. A., 2012. "The Trend of Economic Thinking," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226321363 edited by Bartley, III, W. W. & Kresge, Stephen, April.
    11. McCabe, Kevin A., 1989. "Fiat money as a store of value in an experimental market," Journal of Economic Behavior & Organization, Elsevier, vol. 12(2), pages 215-231, October.
    12. Vernon L. Smith, 1998. "The Two Faces of Adam Smith," Southern Economic Journal, Southern Economic Association, vol. 65(1), pages 2-19, July.
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    1. R. Koppl, 2006. "Austrian economics at the cutting edge," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(4), pages 231-241, December.
    2. Minniti, Maria & Lévesque, Moren, 2008. "Recent developments in the economics of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 603-612, November.
    3. Zhang, Ying & Duysters, Geert, 2010. "Entrepreneurship Development and the Role of Economic Transition in Entrepreneurial Activities in China," MERIT Working Papers 2010-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Chad Seagren, 2011. "Examining social processes with agent-based models," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 24(1), pages 1-17, March.

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