Implications of Trust, Fear, and Reciprocity for Modeling Economic Behavior

39 Pages Posted: 31 Mar 2007

See all articles by James C. Cox

James C. Cox

Georgia State University - Department of Economics

Klarita Sadiraj

Social and Cultural Planning Office

Vjollca Sadiraj

Georgia State University - Department of Economics

Date Written: July 18, 2006

Abstract

This paper reports three experiments with triadic or dyadic designs. The experiments include the moonlighting game in which first-mover actions can elicit positively or negatively reciprocal reactions from second movers. First movers can be motivated by trust in positive reciprocity or fear of negative reciprocity, in addition to unconditional other-regarding preferences. Second movers can be motivated by unconditional other-regarding preferences as well as positive or negative reciprocity. The experimental designs include control treatments that discriminate among actions with alternative motivations. Data from our three experiments and a fourth one are used to explore methodological questions, including the effects on behavioral hypothesis tests of within-subjects vs. across-subjects designs, single-blind vs. double-blind payoffs, random vs. dictator first-mover control treatments, and strategy responses vs. sequential play.

Keywords: Experiments, theory, parsimony, anticipations, reactions, trust, fear, reciprocity, methodology

JEL Classification: C70, C91, D63, D64

Suggested Citation

Cox, James C. and Sadiraj, Klarita and Sadiraj, Vjollca, Implications of Trust, Fear, and Reciprocity for Modeling Economic Behavior (July 18, 2006). Andrew Young School of Policy Studies Research Paper Series No. 07-15, Available at SSRN: https://ssrn.com/abstract=976036 or http://dx.doi.org/10.2139/ssrn.976036

James C. Cox (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-8888 (Phone)
404-651-0425 (Fax)

Klarita Sadiraj

Social and Cultural Planning Office ( email )

PO Box 16164
2500 BD The Hague
Netherlands

Vjollca Sadiraj

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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