Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105087
Authors: 
Johnsen, Åshild A.
Kvaløy, Ola
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5078
Abstract: 
In repeated games, it is hard to distinguish true prosocial behavior from strategic instrumental behavior. In particular, a player does not know whether a reciprocal action is intrinsically or instrumentally motivated. In this paper, we experimentally investigate the relationship between intrinsic and instrumental reciprocity by running a two-period repeated trust game. In the strategic treatment' the subjects know that they will meet twice, while in the non-strategic treatment' they do not know and hence the second period comes as a surprise. We find that subjects anticipate instrumental reciprocity, and that intrinsic reciprocity is rewarded. In fact, the total level of cooperation, in which trust is reciprocated, is higher in the non-strategic treatment. This indicates that instrumental reciprocity crowds out intrinsic reciprocity: If one takes the repeated game incentives out of the repeated game, one sees more cooperation.
Subjects: 
reputation
reciprocity
crowding out
experiment
JEL: 
C91
Document Type: 
Working Paper

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