A theory of sequential reciprocity

Martin Dufwenberg, Georg Kirchsteiger

Research output: Contribution to journalArticlepeer-review

774 Scopus citations

Abstract

Many experimental studies indicate that people are motivated by reciprocity. Rabin [Amer. Econ. Rev. 83 (1993) 1281] develops techniques for incorporating such concerns into game theory and economics. His theory is developed for normal form games, and he abstracts from information about the sequential structure of a strategic situation. We develop a theory of reciprocity for extensive games in which the sequential structure of a strategic situation is made explicit, and propose a new solution concept - sequential reciprocity equilibrium - for which we prove an equilibrium existence result. The model is applied in several examples, and it is shown that it captures very well the intuitive meaning of reciprocity as well as certain qualitative features of experimental evidence.

Original languageEnglish (US)
Pages (from-to)268-298
Number of pages31
JournalGames and Economic Behavior
Volume47
Issue number2
DOIs
StatePublished - May 2004

Keywords

  • Extensive form games
  • Reciprocity

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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