Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75722
Authors: 
Gaechter, Simon
Falk, Armin
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 496
Abstract: 
Recent evidence highlights the importance of social norms in many economic relations. However, many of these relationships are long-term and provide repeated game incentives for performance. We experimentally investigate interaction effects of reciprocity and repeated game incentives in two treatments (one-shot and repeated) of a gift-exchange game. In both treatments we observe reciprocity, which is strengthened in the repeated game. A detailed analysis shows that in the repeated game some subjects imitate reciprocity. Thus, reciprocity and repeated game incentives reinforce each other. Observed behaviour is robust against experience. We conclude that a long-term interaction is a reciprocity-compatible contract enforcement device.
Subjects: 
Reciprocity
reputation
repeated games
incomplete contracts
Document Type: 
Working Paper

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