Toward an Understanding of the Relative Strengths of Positive and Negative Reciprocity

20 Pages Posted: 22 Nov 2010

See all articles by Omar Al-Ubaydli

Omar Al-Ubaydli

George Mason University - Department of Economics; Derasat; George Mason University - Mercatus Center

Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management

Min Sok Lee

University of Chicago - Department of Economics

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: November 2010

Abstract

A stylized fact is that agents respond more acutely to negative than positive stimuli. Such findings have generated insights on mechanism-design, have been featured prominently in policymaking, and more generally have led to discussions of whether preferences are defined over consumption levels or changes in consumption. This study reconsiders this stylized fact. In doing so, it provides insights into an important domain wherein positive stimuli induce a greater response than negative stimuli: a principal-agent game with reputational considerations and with the agent on the market's short end. This common setting represents an important feature of labor markets with involuntary unemployment.

Suggested Citation

Al-Ubaydli, Omar and Gneezy, Uri and Lee, Min Sok and List, John A., Toward an Understanding of the Relative Strengths of Positive and Negative Reciprocity (November 2010). NBER Working Paper No. w16547, Available at SSRN: https://ssrn.com/abstract=1712225

Omar Al-Ubaydli (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
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Derasat ( email )

Bahrain

George Mason University - Mercatus Center ( email )

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Uri Gneezy

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
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Min Sok Lee

University of Chicago - Department of Economics ( email )

1126 East 59th Street
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United States

John A. List

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
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Germany

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