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Sequential reciprocity in two-player, two-stages games: an experimental analysis

  • Geert Dhaene
  • Jan Bouckaert

We experimentally test Dufwenberg and Kirchsteiger’s (2004) theory of sequential reciprocity in a sequential prisoner’s dilemma (SPD) and a mini-ultimatum game (MUG). Data on behavior and first- and second-order beliefs allow us to classify each subject’s behavior as a material best response, a reciprocity best response, both, or none. We found that in both games the behavior of about 80% of the firstmovers was a material best response, a reciprocity best response, or both. The remaining 20% of first-movers almost always made choices that were “too kind” according to the theory of reciprocity. Secondmover behavior, in both games, was fully in line with the predictions of the theory. The average behavior and beliefs across subjects were compatible with a sequential reciprocity equilibrium in the SPD but not in the MUG. We also found first- and second-order beliefs to be unbiased in the SPD and nearly unbiased in the MUG.

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Paper provided by KU Leuven, Faculty of Economics and Business, Department of Economics in its series Working Papers Department of Economics with number ces0717.

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Date of creation: Jun 2007
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Handle: RePEc:ete:ceswps:ces0717
Contact details of provider: Web page: http://feb.kuleuven.be/Economics/

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