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

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Listed author(s):
  • 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
Handle: RePEc:twi:respas:0079
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Keywords: Distributional fairness; experiments; intention-based fairness; reciprocity; ultimatum bargaining;

Other versions of this item:

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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  1. Dirk Engelmann & Martin Strobel, 2004. "Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments," American Economic Review, American Economic Association, vol. 94(4), pages 857-869, September.
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  10. Cox, James C. & Friedman, Daniel & Gjerstad, Steven, 2007. "A tractable model of reciprocity and fairness," Games and Economic Behavior, Elsevier, vol. 59(1), pages 17-45, April.
  11. Suleiman, Ramzi, 1996. "Expectations and fairness in a modified Ultimatum game," Journal of Economic Psychology, Elsevier, vol. 17(5), pages 531-554, November.
  12. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
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  16. Bereby-Meyer, Yoella & Niederle, Muriel, 2005. "Fairness in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 56(2), pages 173-186, February.
  17. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  18. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
  19. James Andreoni & Marco Castillo & Ragan Petrie, 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game," American Economic Review, American Economic Association, vol. 93(3), pages 672-685, June.
  20. 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.
  21. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
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Cited by:

  1. 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.
  2. 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.

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