Citation

Discussion Paper Details

Please find the details for DP3014 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: A Theory of Reciprocity

Author(s): Armin Falk and Urs Fischbacher

Publication Date: October 2001

Keyword(s): cooperation, fairness, game theory and reciprocity

Programme Area(s): Industrial Organization

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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3014

Bibliographic Reference

Falk, A and Fischbacher, U. 2001. 'A Theory of Reciprocity'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3014