Sequential reciprocity in two-player, two-stage games: An experimental analysis

We experimentally test Dufwenberg and Kirchsteiger's (2004) theory of sequential reciprocity in a sequential prisoner's dilemma and a mini-ultimatum game. Data on behavior and first- and second-order beliefs allow us to classify each subject's behavior as a material best response, a r...

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Bibliographic Details
Published in:Games and economic behavior 2010-11, Vol.70 (2), p.289-303
Main Authors: Dhaene, Geert, Bouckaert, Jan
Format: Article
Language:English
Subjects:
Behavior
Belief & doubt
Beliefs
Equilibrium models
Game theory
Mini-ultimatum game
Prisoner's dilemma
Reciprocity
Sequential prisoner's dilemma
Sequential reciprocity
Sequential reciprocity Sequential prisoner's dilemma Mini-ultimatum game
Signalling
Studies
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Summary:We experimentally test Dufwenberg and Kirchsteiger's (2004) theory of sequential reciprocity in a sequential prisoner's dilemma and a mini-ultimatum game. Data on behavior and first- and second-order beliefs allow us to classify each subject's behavior as a material best response, a reciprocity best response, both, or none. We found that in both games the behavior of about 80% of the first movers was a material best response, a reciprocity best response, or both. The remaining 20% of first movers almost always made choices that were “too kind” according to Dufwenberg and Kirchsteiger's theory. Second-mover behavior, in both games, was in line with the predictions of the theory. We found first- and second-order beliefs to be unbiased in the sequential prisoner's dilemma, but biased in the mini-ultimatum game.
ISSN:0899-8256
1090-2473
DOI:10.1016/j.geb.2010.02.009