Reciprocity and Emotions When Reciprocators Know Each Other

CESifo Working Paper Series No. 1674

Tinbergen Institute Discussion Paper No. TI 04-098/1

43 Pages Posted: 9 Sep 2004

See all articles by Ernesto Reuben

Ernesto Reuben

New York University (NYU) - New York University, Abu Dhabi; IZA Institute of Labor Economics

F. A. A. M. Van Winden

University of Amsterdam - Amsterdam School of Economics (ASE); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute

Date Written: February 2006

Abstract

This is an experimental study of a three-player power-to-take game where a take authority is matched with two responders. The game consists of two stages. In the first stage, the take authority decides how much of the endowment of each responder that is left after the second stage will be transferred to the take authority (the so-called take rate). In the second stage, each responder can react by destroying any part of his or her own endowment. Two treatments are considered: one in which all players are 'strangers' to each other (random matching), and one in which the responders know each other from outside the lab and are more or less close 'friends' (whereas the take-authority is again randomly selected). We focus on how the intensity of ties between responders impacts the decisions, beliefs, and emotions of both the responders and the take-authority. Some of our findings are: (1) although take rates are about the same, friends destroy more than strangers when faced with high take rates; (2) coordination on the same destruction level is stronger among friends; (3) the high level of coordination among friends can be explained by their emotional reaction towards one another; (4) the difference between the actual and expected take rate is a much better predictor of experienced emotions and destruction than the difference between the actual and (what is considered as) the fair take rate.

Keywords: Reciprocity, social ties, power-to-take, emotions, 3-person ultimatum game, friends, appropiation

JEL Classification: D70, C92, Z13

Suggested Citation

Reuben, Ernesto and Van Winden, F. A. A. M., Reciprocity and Emotions When Reciprocators Know Each Other (February 2006). CESifo Working Paper Series No. 1674, Tinbergen Institute Discussion Paper No. TI 04-098/1, Available at SSRN: https://ssrn.com/abstract=587322 or http://dx.doi.org/10.2139/ssrn.587322

Ernesto Reuben (Contact Author)

New York University (NYU) - New York University, Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

F. A. A. M. Van Winden

University of Amsterdam - Amsterdam School of Economics (ASE) ( email )

Roetersstraat 11
Amsterdam, North Holland 1018 WB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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