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Retribution in a cheap-talk experiment

Listed author(s):
  • Jordi Brandts
  • Gary Charness

We use a two-person 3-stage game to investigate whether people choose to punish or reward another player by sacrificing money to increase or decrease the other person's payoff. One player sends a message indicating an intended play, which is either favorable or unfavorable to the other player in the game. After the message, the sender and the receiver play a simultaneous 2x2 game. A deceptive message may be made, in an effort to induce the receiver to make a play favorable to the sender. Our focus is on whether receivers' rates of monetary sacrifice depend on the process and the perceived sender's intention, as is suggested by the literature on deception and procedural satisfaction. Models such as Rabin (1993), Sen (1997), and Charness and Rabin (1999) also permit rates of sacrifice to be sensitive to the sender's perceived intention, while outcome-based models such as Fehr and Schmidt (1999) and Bolton and Ockenfels (1997) predict otherwise. We find that deception substantially increases the punishment rate as a response to an action that is unfavorable to the receiver. We also find that a small but significant percentage of subjects choose to reward a favorable action choice made by the sender.

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File URL: https://econ-papers.upf.edu/papers/437.pdf
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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 437.

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Date of creation: Dec 1999
Handle: RePEc:upf:upfgen:437
Contact details of provider: Web page: http://www.econ.upf.edu/

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  1. Timothy N. Cason & Vai-Lam Mui, 1998. "Social Influence in the Sequential Dictator Game," Monash Economics Working Papers archive-37, Monash University, Department of Economics.
  2. Armin Falk & Urs Fischbacher, "undated". "A Theory of Reciprocity," IEW - Working Papers 006, Institute for Empirical Research in Economics - University of Zurich.
  3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
  4. Brandts, Jordi & Sola, Carles, 2001. "Reference Points and Negative Reciprocity in Simple Sequential Games," Games and Economic Behavior, Elsevier, vol. 36(2), pages 138-157, August.
  5. Amartya Sen, 1997. "Maximization and the Act of Choice," Econometrica, Econometric Society, vol. 65(4), pages 745-780, July.
  6. Gary Charness and Matthew Rabin., 2000. "Social Preferences: Some Simple Tests and a New Model," Economics Working Papers E00-283, University of California at Berkeley.
  7. M. Rabin, 2001. "Incorporating Fairness into Game Theory and Economics," Levine's Working Paper Archive 511, David K. Levine.
  8. Paul M. Romer, 1996. "Preferences, Promises, and the Politics of Entitlement," NBER Chapters, in: Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in America, pages 195-228 National Bureau of Economic Research, Inc.
  9. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2001. "On the Nature of Fair Behaviour," CEPR Discussion Papers 2984, C.E.P.R. Discussion Papers.
  10. Shapiro, Debra L. & Bies, Robert J., 1994. "Threats, Bluffs, and Disclaimers in Negotiations," Organizational Behavior and Human Decision Processes, Elsevier, vol. 60(1), pages 14-35, October.
  11. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
  12. Alvin E Roth & J K Murnighan, 1997. "The rule of information in bargaining: an experimental study," Levine's Working Paper Archive 1631, David K. Levine.
  13. Gary Charness, 1996. "Attribution and reciprocity in a simulated labor market: An experimental investigation," Economics Working Papers 283, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 1997.
  14. Charness, Gary B & Levine, David I. I., 2000. "When Are Layoffs Acceptable? Evidence From A Quasi-Experiment," University of California at Santa Barbara, Economics Working Paper Series qt4vs7h4hh, Department of Economics, UC Santa Barbara.
  15. Gary E. Bolton & Jordi Brandts & Elena Katok, 2000. "How strategy sensitive are contributions?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(2), pages 367-387.
  16. Bolton, G.E. & Brandts, J. & Ockenfels, A., 1997. "Measuring Motivations for the Reciprocal Responses Observed in a Simple Dilemma Game," UFAE and IAE Working Papers 400.97, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  17. Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
  18. 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.
  19. Gary E Bolton & Axel Ockenfels, 1997. "A Theory of Equity, Reciprocity, and Competition," Levine's Working Paper Archive 1889, David K. Levine.
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