Trust, Reciprocity, and Favors in Cooperative Relationships
American Economic Journal: Microeconomics
vol. 5,
no. 2, May 2013
(pp. 213-59)
Abstract
We study trust, reciprocity, and favors in a repeated trust game with private information. In our main analysis, players are willing to exhibit trust and thereby facilitate cooperative gains only if such behavior is regarded as a favor that must be reciprocated, either immediately or in the future. The size of a favor owed may decline over time, following neutral periods. Indeed, a favor-exchange relationship with this feature improves on a simple favor-exchange relationship. In some settings, an infrequent and symmetric punishment sustains greater cooperation. A honeymoon period followed by favor-exchange or symmetric punishment can also offer scope for improvement. (JEL C73, D82, Z13)Citation
Abdulkadiroğlu, Atila, and Kyle Bagwell. 2013. "Trust, Reciprocity, and Favors in Cooperative Relationships." American Economic Journal: Microeconomics, 5 (2): 213-59. DOI: 10.1257/mic.5.2.213JEL Classification
- C73 Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
- D82 Asymmetric and Private Information; Mechanism Design
- Z13 Economic Sociology; Economic Anthropology; Social and Economic Stratification
There are no comments for this article.
Login to Comment