Direct vs Indirect Reciprocity: An Experiment Forthcoming, Homo Oeconomicus

In this paper we report experimental results that relate to the reciprocity experiment of Berg, Dickhaut, and McCabe (1995). We consider direct reciprocity, which means to respond in kind to another person, and indirect reciprocity, understood as rewarding someone else. Another variation concerns the information about the multiplier of donations where we compare the benchmark case with a commonly known multiplier to a condition where the multiplier is known with certainty only to donors. Questions which we try to answer are: Will indirect reciprocity induce higher or lower donations?, will donors with the high multiplier “hide behind the small one?”, how do receivers respond to different situations? JEL codes: C72, C92