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On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure

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  • Andreas Nicklisch
  • Irenaeus Wolff

Abstract

We experimentally show that current models of reciprocity are incomplete in a systematic way using a new variant of the ultimatum game that provides second-movers with a marginal-cost-free punishment option. For a substantial proportion of the population, the degree of first-mover unkindness determines the severity of punishment actions even when marginal costs are absent. The proportion of these participants strongly depends on a treatment variation: higher fixed costs of punishment more frequently lead to extreme responses. The fractions of purely selfish and inequity-averse participants are small and stable. Among the variety of reciprocity models, only one accommodates (rather than predicts) parts of our findings. We discuss ways of incorporating our findings into the existing models.

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Paper provided by Thurgauer Wirtschaftsinstitut, Universit�t Konstanz in its series TWI Research Paper Series with number 79.

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Date of creation: 2012
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Handle: RePEc:twi:respas:0079
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Keywords: Distributional fairness; experiments; intention-based fairness; reciprocity; ultimatum bargaining;

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Find related papers by JEL classification:
  • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
  • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
  • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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  17. W. Guth & R. Schmittberger & B. Schwartz, 2010. "An experimental analysis of ultimatum bargaining," Levine's Working Paper Archive 291, David K. Levine.
  18. John Kagel & Katherine Wolfe, 2001. "Tests of Fairness Models Based on Equity Considerations in a Three-Person Ultimatum Game," Experimental Economics, Springer, vol. 4(3), pages 203-219, December.
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Cited by:

  1. Irenaeus Wolff, 2013. "When best-replies are not in Equilibrium: Understanding Cooperative Behaviour," Working Paper Series of the Department of Economics, University of Konstanz 2013-28, Department of Economics, University of Konstanz.
  2. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.

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