ON THE NATURE OF RECIPROCAL MOTIVES

Data from 692 subjects in 11 experimental treatments provide a systematic exploration of the existence and nature of reciprocal behavior in two‐person games. The experimental design discriminates between motivations of reciprocity and (nonreciprocal) other‐regarding preferences. The existence of positive reciprocity is found to be dependent on the level of social distance but not the level of monetary payoff. The larger context in which a decision is made is found to have a significant effect on negative reciprocity. These findings on payoff levels, social distance, decision context, and reciprocity have implications for both theoretical modeling and experimental design. (JEL C70 , C91 , D63 , D64 )