Deserving Altruism: An Experiment in Pure Indirect Reciprocity

33 Pages Posted: 30 Dec 2011 Last revised: 19 Jun 2013

David Ong

Peking University - HSBC Business School

Hong (Hannah) Lin

University of Maryland - Department of Economics

Date Written: December 30, 2011

Abstract

Evidence for positive reciprocity, where subjects give more than dictators with the same endowment, has always been rare. We investigate the significant positive reciprocity in a prior experiment which broke a trust game into a 2-stage dictator game. There, the 2nd dictator knew that the 1st dictator was not told of the possibility of reciprocation. We conjectured that the positive reciprocity was the result of the 1st dictators’ revealing their “altruism type.” We predicted that this “type preference” based reciprocity of the 2nd dictator would also be expressed through the indirect reciprocity of an observing 3rd dictator. To test this, we introduced 3rd dictators, again unknown to the 1st dictators, who could now give part of their exogenous endowments to the 1st dictators after observing the 1st dictators’ giving to the 2nd dictators. We used variation in payment schemes to make the announcement of the “last round” credible to 3rd dictators. We found that the 3rd dictators’ giving to the 1st dictators was significantly correlated with the 1st dictators’ giving to the 2nd dictators, controlling for their endowments. To our knowledge, our double-blind design with silent exiting and exogenous endowment is the first to separate “pure” indirect reciprocity from possible inequity aversion, shame, guilt, social influence, efficiency, and experimenter demand effects. Our results suggest that indirect reciprocity is weaker than direct reciprocity. We show evidence for a previously hypothesized demand effect of explicit over implicit double-blindness, but only for the lowest level of endowment.

Keywords: altruism, indirect reciprocity, type preferences, double-blindness, silent exiting, small payments

JEL Classification: C91, C72, D64

Suggested Citation

Ong, David and Lin, Hong (Hannah), Deserving Altruism: An Experiment in Pure Indirect Reciprocity (December 30, 2011). Available at SSRN: https://ssrn.com/abstract=1977665 or http://dx.doi.org/10.2139/ssrn.1977665

David Ong (Contact Author)

Peking University - HSBC Business School ( email )

Room 402, Building C
Shenzhen, Guangdong 518055
China
86 137-6047-4054 (Phone)
86-755-2603-5344 (Fax)

Hong (Hannah) Lin

University of Maryland - Department of Economics ( email )

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