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Gift-giving, Quasi-Credit and Reciprocity

Author

Listed:
  • Jonathan P. Thomas

    (Department of Economics, University of St. Andrews,)

  • Tim Worrall

    (Department of Economics Keele University)

Abstract

The fluctuations in incomes inherent in rural communities can be attenuated by reciprocal assistance. A model of reciprocal assistance based upon rational action and voluntary participation is presented. Individuals provide assistance only if the costs of so doing are outweighed by the benefits from expected future reciprocation. A distinction is made between general reciprocity where the counter obligation is expected but not certain and balanced reciprocity where there is a from counter obligation. This from counter obligation is reflected by including a loan or quasi-credit element in any assistance. It is shown how this can increase the assistance given and it may explain the widespread use of quasi-credit in rural comunitities. Moreover it is shown that for a range of parameter values consistent with evidence from three villages in southern India, a simple scheme of gift-giving and quasi-credit can do almost as well as theoretically better but more complicated schemes.

Suggested Citation

  • Jonathan P. Thomas & Tim Worrall, 2000. "Gift-giving, Quasi-Credit and Reciprocity," Keele Department of Economics Discussion Papers (1995-2001) 2000/20, Department of Economics, Keele University.
    • Handle: RePEc:kee:keeldp:2000/20
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    File URL: http://www.keele.ac.uk/depts/ec/wpapers/0020.pdf
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    2. Lukach, R. & Plasmans, J.E.J., 2002. "Measuring Knowledge Spillovers using Patent Citations : Evidence from the Belgian Firm's Data," Other publications TiSEM d78bf59a-e0ff-4451-86b9-1, Tilburg University, School of Economics and Management.
    3. Delpierre, Matthieu & Verheyden, Bertrand & Weynants, Stephanie, "undated". "On the interaction between risk-taking and risk-sharing under farm household wealth heterogeneity," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122556, European Association of Agricultural Economists.
    4. Jaehyuck Lee, 2011. "Kula and relation capital: Rational reinterpretation of primitive gift institution," Rationality and Society, , vol. 23(4), pages 475-512, November.
    5. Matthew Odedokun, 2003. "Economics and Politics of Official Loans versus Grants: Panoramic Issues and Empirical Evidence," WIDER Working Paper Series DP2003-04, World Institute for Development Economic Research (UNU-WIDER).
    6. Garance Genicot, Georgetown University and Debraj Ray, New York University and Instituto de An´alisis Econ´omico (CSIC), 2004. "Informal Insurance, Enforcement Constraints, and Group Formation," Working Papers gueconwpa~04-04-03, Georgetown University, Department of Economics.
    7. Greig, Fiona & Bohnet, Iris, 2005. "Is There Reciprocity in a Reciprocal Exchange Economy? Evidence from a Slum in Nairobi, Kenya," Working Paper Series rwp05-044, Harvard University, John F. Kennedy School of Government.
    8. Stig S. Gezelius, 2017. "Considerate Exchange: Exploring Social Exchange on Family Farms," Journal of Family and Economic Issues, Springer, vol. 38(1), pages 18-32, March.
    9. Krishnamurthy, Sandeep & Tripathi, Arvind K., 2009. "Monetary donations to an open source software platform," Research Policy, Elsevier, vol. 38(2), pages 404-414, March.
    10. Fiona Greig & Iris Bohnet, 2008. "Is There Reciprocity In A Reciprocal‐Exchange Economy? Evidence Of Gendered Norms From A Slum In Nairobi, Kenya," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 77-83, January.

    More about this item

    Keywords

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    JEL classification:

    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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