Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19138
Authors: 
Reuben, Ernesto
van Winden, Frans
Year of Publication: 
2006
Series/Report no.: 
CESifo Working Paper 1674
Abstract: 
This is an experimental study of a three-player power-to-take game where a take authority is matched with two responders. The game consists of two stages. In the first stage, the take authority decides how much of the endowment of each responder that is left after the second stage will be transferred to the take authority (the so-called take rate). In the second stage, each responder can react by destroying any part of his or her own endowment. Two treatments are considered: one in which all players are 'strangers? to each other (random matching), and one in which the responders know each other from outside the lab and are more or less close ?friends? (whereas the take-authority is again randomly selected). We focus on how the intensity of ties between responders impacts the decisions, beliefs, and emotions of both the responders and the take-authority. Some of our findings are: (1) although take rates are about the same, friends destroy more than strangers when faced with high take rates; (2) coordination on the same destruction level is stronger among friends; (3) the high level of coordination among friends can be explained by their emotional reaction towards one another; (4) the difference between the actual and expected take rate is a much better predictor of experienced emotions and destruction than the difference between the actual and (what is considered as) the fair take rate.
Subjects: 
reciprocity
social ties
emotions
expectations
experiment
friends
principalagent relationship
appropriation
fairness
JEL: 
H20
A10
C92
Z13
C91
C72
Document Type: 
Working Paper

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