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Reciprocity: theory and facts

Introduction to the special issue

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Abstract

The importance of reciprocity is not new in economics. Contractual market exchanges and long-run interactions are both situations based on self-interested reciprocal behaviour. However, reciprocity is not only a behaviour but also a motive that sometimes appears to be inconsistent with self-interest. This fact produces a tension between those who try to explain reciprocal behaviour within the standard framework and those who aim at enlarging it with the introduction of additional behavioural principles. This special issue collects a selection of papers presented at the International Conference “Reciprocity. Theory and facts” were the two perspectives were compared and discussed. In this Introduction note we provide first a broad view of the role of reciprocity in economics and then a quick introduction to each of the contributions enclosed in this special issue.

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Notes

  1. On the differences between behavioural and experimental economics, both developed in the 1970s, see Bruni and Sugden (2007).

  2. Elster (1989) and Hollis (1998) both aim at establishing a kind of social rationality different from economic rationality, in order to explain the rise of cooperation in a market context.

  3. For a recent and convincing review, see also Sobel (2005), while among the first economists to study reciprocity in economics was Kolm (1984).

  4. See for example Attanasi and Nagel (2007), Battigalli and Dufwenberg (2005), Dufwenberg and Gneezy (2000), Dufwenberg and Kirchsteiger (2004), Guerra and Zizzo (2004), Kolpin (1992).

  5. The key element in Rabin’s theory is the existence of a “psychological” pay-off in addition to the monetary pay-off when the player plays kind (whereas in monetary terms she would be better off by not trusting the other). The idea of the psychological payoff has been disputed by those who, like Binmore for example, endorse a “revealed preferences” approach (if an agent has chosen a strategy, this reveals, ex post, what she prefers). As a matter of fact, if we interpret payoffs not in monetary terms but in utility terms, the distinction between material and psychological loses its analytical meaning (although it conserves a hermeneutical value). On this topic see also Battigalli and Dufwenberg (2005), Pelligra (2005).

  6. Fehr and Schmidt (1999) and Bolton and Ockenfels (2000).

  7. .The two authors particularly stress one innovative aspect of their theory (partly deviating from Rabin’s), as they claim that it «explains the relevant stylized facts of a wide range of experimental games. [...] Further, the theory explains why subjects behave differently in treatments where they experience the actions of real persons compared to treatments where they face “actions” caused by a random device. [...] Finally, the theory explains why in bilateral interactions outcomes tend to be “fair” whereas in competitive [and anonymous] markets even extremely unfair distributions may arise» (Falk and Fischbacher 2006, p. 293).

  8. They also make a point on the differences between reciprocity and inequality aversion.

  9. Many among the strong reciprocity models are set in the context of public good games (see Bowles and Gintis 2004).

  10. Fehr and Gächter (2000) have carried out several experiments in the attempt to explain and verify reciprocating behaviours. In particular they have come to the following significant conclusions: (1) reciprocity has been observed also in one-shot games and in contexts in which it is “costly” to implement; (2) reciprocating behaviours are displayed also when agents ignore the identity of the subjects they are interacting with (anonymity); (3) reciprocity has also been ascertained when players are guaranteed that their behaviour cannot be observed;(4) reciprocating behaviours have also been reported when monetary payoffs are particularly high. For a review see Sobel (2005) and Bowles and Gintis (2004). Pointedly, the key question arising from these experiments is: what kind of reciprocity are we talking about?

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Acknowledgments

We would like to thank Matteo Rizzolli for his invaluable research assistance, Pier Luigi Porta, Robert Sugden, Stefano Zamagni, and all the participants to the “Reciprocity: Theory and Facts” Conference, for providing numberless intellectual stimuli, new ideas and all the ingredients for a fruitful interdisciplinary dialogue.

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Authors and Affiliations

  1. Department of Economics, University of Milano-Bicocca, Piazza dell’Ateneo Nuovo 1, 20126, Milano, Italy

    Luigino Bruni & Mario Gilli

  2. Department of Economics, University of Cagliari, Viale S.Ignazio 17, 09123, Cagliari, Italy

    Vittorio Pelligra

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  1. Luigino Bruni
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  2. Mario Gilli
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  3. Vittorio Pelligra
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Correspondence to Luigino Bruni.

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Bruni, L., Gilli, M. & Pelligra, V. Reciprocity: theory and facts. Int. Rev. Econ. 55, 1–11 (2008). https://doi.org/10.1007/s12232-008-0042-9

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