An Experimental Study of Asymmetric Reciprocity

Do people have a stronger propensity to reward or punish? When reacting to intentions, Offerman (2002) concluded that people punish more. Using the Falk and Fischbacher (2006) model, we extend Offerman’s design in two ways. First, we control for the strength of the positive/negative intentions to which an individual reacts when rewarding/punishing. Second, we can precisely compare the strength of intentionand distribution-based motives for reward/punishment. Doing so requires measuring second-order expectations of subjects’ own behavior, i.e., what a subject predicts that other subjects predict that he will do. Second-order expectations can be elicited directly or they can be induced by telling a subject what others expect him to do. Under elicited second-order expectations, we find that negative reciprocity is stronger than positive reciprocity, though if we isolate the distributional motive for reciprocity, then we find that positive reciprocity is stronger than negative reciprocity. Under induced second-order expectations, positive distributional reciprocity is stronger than negative distributional reciprocity while other forms of reciprocity are equally strong. JEL code: C9