Separating Gratitude from Guilt in the Laboratory

Abstract:     
In contrast to guilt based reciprocity, which hypothesizes that reciprocity is an increasing function of the 2nd order expectation of trustor’s 1st order expectations for reciprocation, we test for reciprocity which is a decreasing function of trustees 2nd order expectations, i.e., that people can reciprocate out of gratitude. To unambiguously decrease 2nd order expectations in our treatment, we broke up a standard trust game into a two stage dictator game where the 1st round dictator was not informed about the possibility of a 2nd round. Furthermore, the 2nd dictator could “silently exit” by not sending anything to the 1st round dictator. We found a significant increase in both the amount of reciprocation and the number of people reciprocating as compared to our standard trust and dictator games controls. Most 2nd dictators became poorer than 1st dictators so inequality aversion can be ruled out. We found support for our hypothesis in the prior data of others who tested for guilt based reciprocity. Our result also seems to reconcile conflicting results in that literature. To our knowledge, this is the first paper which shows that kindness distinct from guilt, shame, efficiency, and inequity aversion could be a motive for reciprocity. Our strong positive reciprocity result also suggests why it has been difficult to find in the past.

Number of Pages in PDF File: 24

Keywords: guilt, gratitude, reciprocity, trust game, doubleblind, silent exiting

JEL Classification: A12, A13, C72, C91, D64

working papers series