Is There Reciprocity in a Reciprocal-Exchange Economy? Evidence from a Slum in Nairobi, Kenya

43 Pages Posted: 27 Sep 2005

See all articles by Fiona Greig

Fiona Greig

JP Morgan Chase & Co. - JP Morgan Chase Institute

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Date Written: July 2005

Abstract

Norms of reciprocity contribute to the enforcement of cooperative agreements in bilateral sequential exchange. This paper examines the norms that apply in a reciprocal-exchange economy and what effect on trust, trustworthiness and efficiency they have. In our one-shot investment game, experiments with Nairobi slum dwellers, people generally adhered to the norm of balanced reciprocity, which obligates quid-pro-quo returns for any level of trust. This norm differs from conditional reciprocity, prevalent in developed countries, according to which higher trust levels are rewarded with proportionally larger returns. Which norms prevail has implications for the gains from trade realized in bilateral exchange.

Keywords: Reciprocity, trust, development, gender, cross-cultural experiments

JEL Classification: C72, C91

Suggested Citation

Greig, Fiona and Bohnet, Iris, Is There Reciprocity in a Reciprocal-Exchange Economy? Evidence from a Slum in Nairobi, Kenya (July 2005). KSG Working Paper No. RWP05-044, Available at SSRN: https://ssrn.com/abstract=807364 or http://dx.doi.org/10.2139/ssrn.807364

Fiona Greig (Contact Author)

JP Morgan Chase & Co. - JP Morgan Chase Institute ( email )

New York, NY
United States

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-5605 (Phone)
617-496-5747 (Fax)

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