Sequential Reciprocity in Two-Player, Two-Stages Games: An Experimental Analysis

62 Pages Posted: 17 Oct 2007

See all articles by Geert Dhaene

Geert Dhaene

KU Leuven - Department of Economics

Jan Bouckaert

University of Antwerp - Department of Economics

Date Written: June 2007

Abstract

We experimentally test Dufwenberg and Kirchsteiger's (2004) theory of sequential reciprocity in a sequential prisoner's dilemma (SPD) and a mini-ultimatum game (MUG). Data on behavior and first- and second-order beliefs allow us to classify each subject's behavior as a material best response, a reciprocity best response, both, or none. We found that in both games the behavior of about 80% of the first-movers was a material best response, a reciprocity best response, or both. The remaining 20% of first-movers almost always made choices that were "too kind" according to the theory of reciprocity. Second-mover behavior, in both games, was fully in line with the predictions of the theory. The average behavior and beliefs across subjects were compatible with a sequential reciprocity equilibrium in the SPD but not in the MUG. We also found first- and second-order beliefs to be unbiased in the SPD and nearly unbiased in the MUG.

Keywords: sequential reciprocity

JEL Classification: A13, C70, C92, D63

Suggested Citation

Dhaene, Geert and Bouckaert, Jan, Sequential Reciprocity in Two-Player, Two-Stages Games: An Experimental Analysis (June 2007). Available at SSRN: https://ssrn.com/abstract=1021961 or http://dx.doi.org/10.2139/ssrn.1021961

Geert Dhaene (Contact Author)

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

Jan Bouckaert

University of Antwerp - Department of Economics ( email )

Prinsstraat 13
Antwerp, B-2000
Belgium
+32 3 220 4055 (Phone)

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