If you’re helping someone and expecting something in return, you’re doing business not kindness.
Unknown.
Abstract
Reciprocity has been shown to be sensitive to perceived intentions, however, not much is known about the intensity of reciprocal responses to the precise nature of those intentions. For example, a person can strategically appear to be kind while being self-serving or can be selflessly (genuinely) kind. Do these two intentions elicit different reciprocal reactions? We propose a conjecture that self-serving but generous actions diminish the positively reciprocal response, compared to selfless generous actions. We classify actions that increase a recipient’s maximum payoff, but by less than the giver’s maximum payoff, as being self-serving generous actions, while classifying actions that increase a recipient’s maximum payoff by more than the giver’s as selfless generous actions. We hypothesize that selfless generous actions are considered more generous than self-serving generous actions, and that self-serving generous actions will therefore result in a diminished reciprocal response. We test this conjecture using two novel experimental designs. We find some evidence that subjects perceive self-serving generous actions as being less generous than selfless generous actions, but no empirical support for our conjecture on the diminished reciprocal response.
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Notes
As will become clearer in our design the strategic element stems from the fact that the FMs can receive more back than their outside option. This is possible in all our treatments; in our self-serving treatments, more people will be taking the action for strategic reasons as it is more feasible that they will receive back more.
Other shortcomings and limitations of belief-dependent models of reciprocity are discussed in Hinz and Nicklisch (2015) who explore the continuity of the reference value [employed by Rabin (1993) and Dufwenberg and Kirchsteiger (2004)] and the continuity of the intention factor (Falk and Fischbacher 2006) in a series of mini-ultimatum games. They find that the distance of the observed offers to the proposed reference value provides a poor measure for their kindness and that a pairwise comparison of offers à la Falk and Fischbacher’s model cannot explain behavior in richer settings.
What definition best approximates self-serving generosity under what circumstances is an interesting empirical question in its own right; however, we leave such explorations for future research.
SMs can spend the entirety of the amount they are sent by the FM, but are limited in not reducing the FM’s final payoff below zero.
The theory is general (N players), however, the two player case is presented for ease of explanation. We present the theory in its original version, where ‘me’ represents the SM and ‘you’ the FM.
\(A_{X}\) is the preference ordering after observing the action that creates opportunity set X, where X \(\in\) C.
In Dufwenberg and Gneezy (2000), x took the values of 4, 7, 10, 13, and 16. In our experiment we chose x = 4 for replication purposes, and x = − 2 as it was the first negative instance counting down in steps of three from x = 4.
A power analysis is presented in Appendix E of the ESM.
Minimum wage in New Zealand was NZ$13.50 per hour at the time of the experiments.
We adopt a conservative approach and report 2-sided tests throughout the paper.
A Mann–Whitney test on pooled data from both FMs and SMs reports p = .007.
See also Woods and Servátka (2016) for evidence of psychological forward induction and the updating of beliefs in the environment of the Lost Wallet Game.
Note the deliberate similarity to the Investment Game, where amounts invested by the FM are typically tripled for the SM to split.
CFS do not mention moves that are determined by chance, so we assume that MGT ordering is determined by the expected value of \(m_{G}^{*}\) and \(y_{G}^{*}\). Such an assumption seems natural and intuitive, and a similar approach is used by Sebald (2010) to extend Dufwenberg and Kirchsteiger (2004).
A power analysis is presented in Appendix E of the ESM.
Using pooled data of both FM and SM generosity perceptions, a Mann–Whitney test reports: for H4 p = .073; for H5 p = .035; and for H6 p = .536. Note that such an approach provides support for H5 and mild evidence in support of H4.
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Acknowledgements
We would like to thank the editor Lata Gangadharan, Tim Cason, Jeremy Clark, Andreas Nicklisch, Vjollca Sadiraj, Daniel Schunk, Radovan Vadovič, and two anonymous referees for helpful comments, as well as participants of various conferences, workshops, and seminars where this work was presented. This paper is based on Daniel Woods’ Masters thesis written at the University of Canterbury (Woods 2013). Funding was provided by the College of Business and Economics, University of Canterbury and the Macquarie Graduate School of Management.
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Woods, D., Servátka, M. Nice to you, nicer to me: Does self-serving generosity diminish the reciprocal response?. Exp Econ 22, 506–529 (2019). https://doi.org/10.1007/s10683-018-9561-8
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DOI: https://doi.org/10.1007/s10683-018-9561-8