Interdependent Preferences and Reciprocity

392 ∗ Sobel: University of California, San Diego. I presented a version of this paper at the First World Congress of the Game Theory Society and to my colleagues at the Center for Advanced Study in the Behavioral Sciences. I thank Eli Berman, Antonio Cabrales, Miguel CostaGomes, Vincent Crawford, David M. Kreps, Herbert Gintis, Mark Machina, Efe Ok, Luís Pinto, Matthew Rabin, Paul Romer, Klaus Schmidt, Uzi Segal, Joel Watson, and Kang-Oh Yi for discussions, references, and comments. I am especially grateful to two referees who supplied detailed, intelligent, and constructive comments on an earlier version of the manuscript and to John McMillan for his advice and encouragement. I worked on this project while a Fellow at the Center for Advanced Study in the Behavioral Sciences. I thank my classmates at the Center for conversations and encouragement and the Center for financial and clerical support. NSF funding is also gratefully acknowledged.