Intrinsic and Instrumental Reciprocity: An Experimental Study

Luis M. B. Cabral, Erkut Ozbay, and Andrew Schotter , Games and Economic Behavior 87 , 100-121 , September 2014.

In the context of an indefinitely repeated veto game, we devise an experiment to distinguish between alternative explanations of generous behavior (accepting negative payoffs): altruism, intrinsic backward-looking reciprocity, and instrumental forward-looking reciprocity. Our results are broadly consistent with the hypothesis that observed sacrifices are motivated by equilibrium selfish, forward-looking reciprocal behavior although we find a more subtle way in which past kindness affects behavior.

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