A Theory of Reciprocity

Armin Falk and Urs Fischbacher

No 3014, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental games. Among them are the ultimatum game, the gift-exchange game, a reduced best-shot game, the dictator game, the prisoner's dilemma, and public goods games. Furthermore, the theory explains why the same consequences trigger different reciprocal responses in different environments. Finally, the theory explains why in bilateral interactions outcomes tend to be ?fair? whereas in competitive markets even extremely unfair distributions may arise.

Keywords: Reciprocity; Fairness; Cooperation; Game theory (search for similar items in EconPapers)
JEL-codes: C70 H41 (search for similar items in EconPapers)
Date: 2001-10
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://cepr.org/publications/DP3014 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: A theory of reciprocity (2006)
Working Paper: A Theory of Reciprocity (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:3014

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP3014

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().