A theory of sequential reciprocity

Martin Dufwenberg; Georg Kirchsteiger

doi:10.1016/j.geb.2003.06.003

A theory of sequential reciprocity

Martin Dufwenberg, Georg Kirchsteiger

Economics

Research output: Contribution to journal › Article › peer-review

1010 Scopus citations

Abstract

Many experimental studies indicate that people are motivated by reciprocity. Rabin [Amer. Econ. Rev. 83 (1993) 1281] develops techniques for incorporating such concerns into game theory and economics. His theory is developed for normal form games, and he abstracts from information about the sequential structure of a strategic situation. We develop a theory of reciprocity for extensive games in which the sequential structure of a strategic situation is made explicit, and propose a new solution concept - sequential reciprocity equilibrium - for which we prove an equilibrium existence result. The model is applied in several examples, and it is shown that it captures very well the intuitive meaning of reciprocity as well as certain qualitative features of experimental evidence.

Original language	English (US)
Pages (from-to)	268-298
Number of pages	31
Journal	Games and Economic Behavior
Volume	47
Issue number	2
DOIs	https://doi.org/10.1016/j.geb.2003.06.003
State	Published - May 2004

Keywords

Extensive form games
Reciprocity

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.geb.2003.06.003

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title = "A theory of sequential reciprocity",

abstract = "Many experimental studies indicate that people are motivated by reciprocity. Rabin [Amer. Econ. Rev. 83 (1993) 1281] develops techniques for incorporating such concerns into game theory and economics. His theory is developed for normal form games, and he abstracts from information about the sequential structure of a strategic situation. We develop a theory of reciprocity for extensive games in which the sequential structure of a strategic situation is made explicit, and propose a new solution concept - sequential reciprocity equilibrium - for which we prove an equilibrium existence result. The model is applied in several examples, and it is shown that it captures very well the intuitive meaning of reciprocity as well as certain qualitative features of experimental evidence.",

keywords = "Extensive form games, Reciprocity",

author = "Martin Dufwenberg and Georg Kirchsteiger",

note = "Funding Information: This paper was conceived while we were both at the CentER for Economic Research at Tilburg University. We appreciate helpful comments from Geir Asheim, Gary Charness, Doug DeJong, Uri Gneezy, Manfred Nermuth, Muriel Niederle, Matthew Rabin, Arno Riedl, Aldo Rustichini, three referees, the associate editor, and the participants of several seminars. Dufwenberg{\textquoteright}s research has been supported by a grant from Tom Hedelius and Jan Wallander{\textquoteright}s research foundation.",

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AU - Kirchsteiger, Georg

N1 - Funding Information: This paper was conceived while we were both at the CentER for Economic Research at Tilburg University. We appreciate helpful comments from Geir Asheim, Gary Charness, Doug DeJong, Uri Gneezy, Manfred Nermuth, Muriel Niederle, Matthew Rabin, Arno Riedl, Aldo Rustichini, three referees, the associate editor, and the participants of several seminars. Dufwenberg’s research has been supported by a grant from Tom Hedelius and Jan Wallander’s research foundation.

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N2 - Many experimental studies indicate that people are motivated by reciprocity. Rabin [Amer. Econ. Rev. 83 (1993) 1281] develops techniques for incorporating such concerns into game theory and economics. His theory is developed for normal form games, and he abstracts from information about the sequential structure of a strategic situation. We develop a theory of reciprocity for extensive games in which the sequential structure of a strategic situation is made explicit, and propose a new solution concept - sequential reciprocity equilibrium - for which we prove an equilibrium existence result. The model is applied in several examples, and it is shown that it captures very well the intuitive meaning of reciprocity as well as certain qualitative features of experimental evidence.

AB - Many experimental studies indicate that people are motivated by reciprocity. Rabin [Amer. Econ. Rev. 83 (1993) 1281] develops techniques for incorporating such concerns into game theory and economics. His theory is developed for normal form games, and he abstracts from information about the sequential structure of a strategic situation. We develop a theory of reciprocity for extensive games in which the sequential structure of a strategic situation is made explicit, and propose a new solution concept - sequential reciprocity equilibrium - for which we prove an equilibrium existence result. The model is applied in several examples, and it is shown that it captures very well the intuitive meaning of reciprocity as well as certain qualitative features of experimental evidence.

KW - Extensive form games

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A theory of sequential reciprocity

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Keywords

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