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Toward an understanding of the relative strengths of positive and negative reciprocity

  • Omar Al-Ubaydli
  • Uri Gneezy
  • Min Sok Lee
  • John A. List

A stylized fact is that agents respond more acutely to negative than positive stimuli. Such findings have generated insights on mechanism-design, have been featured prominently in policymaking, and more generally have led to discussions of whether preferences are defined over consumption levels or changes in consumption. This study reconsiders this stylized fact. In doing so, it provides insights into an important domain wherein positive stimuli induce a greater response than negative stimuli: a principal-agent game with reputational considerations and with the agent on the market's short end. This common setting represents an important feature of labor markets with involuntary unemployment.

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File URL: http://www.nber.org/papers/w16547.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16547.

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Date of creation: Nov 2010
Date of revision:
Publication status: published as Judgment and Decision Making, Vol. 5, No. 7, December 2010, pp. 524–539
Handle: RePEc:nbr:nberwo:16547
Note: LS
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Web page: http://www.nber.org
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  1. Daniel Houser & Rebecca Morton & Thomas Stratmann, 2008. "Turned Off or Turned Out? Campaign Advertising,Information, and Voting," Working Papers 1005, George Mason University, Interdisciplinary Center for Economic Science, revised Jul 2008.
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