On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure
34 Pages Posted: 15 Jun 2011
Date Written: June 3, 2011
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 subjects strongly depends on a treatment variation: higher fixed costs of punishment lead to harsher 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. The treatment effect is unaccounted for. We discuss ways of incorporating our findings into the existing models.
Keywords: distributional fairness, experiments, intention-based fairness, reciprocity, ultimatum bargaining
JEL Classification: C91, D03, D63
Suggested Citation: Suggested Citation