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

• Published in: Games and economic behavior Vol. 70; no. 2; pp. 289 - 303
• Main Authors: Dhaene, Geert, Bouckaert, Jan
• Format: Journal Article
• Language: English
• Published: Duluth Elsevier Inc 01.11.2010; Elsevier; Academic Press
• Series: Games and Economic Behavior
• 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; D63; A13; Sequential reciprocity; Sequential prisoner's dilemma; Mini-ultimatum game; C70; C92
• ISSN: 0899-8256; 1090-2473
• DOI: 10.1016/j.geb.2010.02.009

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.