Skip to main content
SpringerLink
Log in

Reciprocity—An Indirect Evolutionary Analysis

  • Chapter
  • First Online:
Fairness in Bargaining and Markets

Part of the book series: Lecture Notes in Economics and Mathematical Systems ((LNE,volume 627))

  • 639 Accesses

Abstract

In experimental investigations of the ultimatum game, participants quite consistently offer 30–50% of an available monetary surplus as first-moving proposers. They reject offers of less than 20% as second-moving responders, which results in zero payoff for both players. Particularly the latter observation is hard to reconcile with the assumption that economic actors are rational maximizers of their monetary payoffs.1 However, observations can be explained very well by including a consideration for fairness and reciprocity in players’ preferences. This is also true regarding many other games for which experimental findings are puzzling from a monetary-payoff maximization point of view.

Neoclassical theory does not restrict preferences to those based solely on monetary payoffs or to strict monotonicity. However, economic agents who are spiteful, enjoy a warm glow donating money to anonymous strangers, or feel it worthwhile to incur private costs to punish free-riders of public goods have not been the conventional assumption in economics. The award of 2002’s Nobel Prize to Daniel Kahneman and Vernon Smith is only one indicator that this is changing fast.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 89.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 119.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Benaïm M, Weibull JW (2003) Deterministic approximation of stochastic evolution in games. Econometrica 71(3):873–903

    Article  Google Scholar 

  • Berninghaus SK, Güth W, Kliemt H (2003) From teleology to evolution—Bridging the gap between rationality and adaptation in social explanation. J Evol Econ 13(4):385–410

    Article  Google Scholar 

  • Berninghaus SK, Ehrhart KM, Ott M (2006) A network experiment in continuous time: The influence of link costs. Exp Econ 9(3):237–251

    Article  Google Scholar 

  • Bolton GE, Ockenfels A (2000) ERC: A theory of equity, reciprocity, and competition. Am Econ Rev 90(1):166–193

    Article  Google Scholar 

  • Cameron L (1999) Raising the stakes in the ultimatum game: Experimental evidence from Indonesia. Econ Inq 37(1):47–59

    Article  Google Scholar 

  • Charness G, Rabin M (2002) Understanding social preferences with simple tests. Q J Econ 117(3):817–869

    Article  Google Scholar 

  • Dekel E, Ely JC, Yilankaya O (2007) Evolution of preferences. Rev Econ Stud 74(3):685–704

    Article  Google Scholar 

  • Dufwenberg M, Kirchsteiger G (2004) A theory of sequential reciprocity. Games Econom Behav 47(2):268–298

    Article  Google Scholar 

  • Falk A, Fischbacher U (2006) A theory of reciprocity. Games Econom Behav 54(2):293–315

    Article  Google Scholar 

  • Falk A, Kosfeld M (2003) It's all about connections: Evidence on network formation, IZA Discussion Paper No. 777, IZA, Bonn, Germany

    Google Scholar 

  • Falk A, Fehr E, Fischbacher U (2003) On the nature of fair behavior. Econ Inq 41(1):20–26

    Article  Google Scholar 

  • Fehr E, Gächter S (1998) Reciprocity and economics. The economic implications of homo reciprocans. Eur Econ Rev 42(3–5):845–859

    Article  Google Scholar 

  • Fehr E, Schmidt KM (1999) A theory of fairness, competition and cooperation. Q J Econ 114(3):817–868

    Article  Google Scholar 

  • Gale J, Binmore KG, Samuelson L (1995) Learning to be imperfect: The ultimatum game. Games Econom Behav 8(1):56–90

    Article  Google Scholar 

  • Geanakoplos J, Pearce D, Stacchetti E (1989) Psychological games and sequential rationality. Games Econom Behav 1(1):60–79

    Article  Google Scholar 

  • Güth W (1995) An evolutionary approach to explaining cooperative behavior by reciprocal incentives. Int J Game Theor 24(4):323–344

    Article  Google Scholar 

  • Güth W, Napel S (2006) Inequality aversion in a variety of games—An indirect evolutionary analysis. Econ J 116(514):1037–1056

    Article  Google Scholar 

  • Güth W, Yaari ME (1992) Explaining reciprocal behavior in simple strategic games: An evolutionary approach. In: Witt U (ed) Explaining Process and Change—Approaches to Evolutionary Economics, The University of Michigan Press, Ann Arbor, MI, chap 2, pp 23–34

    Google Scholar 

  • Güth W, Kliemt H, Napel S (2003) Wie du mir, so ich dir!—Evolutionäre Modellierungen. In: Held M, Kubon-Gilke G, Sturn R (eds) Jahrbuch Normative und Institutionelle Grundfragen der Ökonomik, Band 2: Experimentelle Ökonomik, Metropolis-Verlag, Marburg, Germany, pp 113–139

    Google Scholar 

  • Henrich J, Boyd R, Bowles S, Camerer CF, Fehr E, Gintis H, McElreath R (2001) In search of homo economicus: Behavioral experiments in 15 small-scale societies. Am Econ Rev 91(2):73–78

    Article  Google Scholar 

  • Huck S, Oechssler J (1999) The indirect evolutionary approach to explaining fair allocations. Games Econom Behav 28(1):13–24

    Article  Google Scholar 

  • Napel S (2003) Aspiration adaption in the ultimatum minigame. Games Econom Behav 43(1):86–106

    Article  Google Scholar 

  • Nowak MA, Page KM (2002) Empathy leads to fairness. Bull Math Biol 64(6):1101–1116

    Article  Google Scholar 

  • Nowak MA, Page KM, Sigmund K (2000) Fairness versus reason in the ultimatum game. Science 289(5485):1773–1775

    Article  Google Scholar 

  • Oechssler J, Riedel F (2001) Evolutionary dynamics on infinite strategy spaces. J Econ Theory 17(1):141–162

    Article  Google Scholar 

  • Oechssler J, Riedel F (2002) On the dynamic foundation of evolutionary stability in continuous models. J Econ Theory 107(2):223–252

    Article  Google Scholar 

  • Possajennikov A (2005) Cooperation and competition: Learning of strategies and evolution of preferences in prisoners' dilemma and hawk-dove games. Int Game Theory Rev 7(4):443–459

    Article  Google Scholar 

  • Poulsen A, Poulsen O (2006) Endogenous preferences and social-dilemma institutions. J Inst Theor Econ 162(4):627–660

    Article  Google Scholar 

  • Rabin M (1993) Incorporating fairness into game theory and economics. Am Econ Rev 83(5):1281–1302

    Google Scholar 

  • Roth AE, Erev I (1995) Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term. Games Econom Behav 8(1):164–212

    Article  Google Scholar 

  • Samuelson L (2001) Introduction to the evolution of preferences. J Econ Theory 97(2):225–230

    Article  Google Scholar 

  • Sethi R, Somanathan E (2001) Preference evolution and reciprocity. J Econ Theory 97(2):273–297

    Article  Google Scholar 

  • Slonim R, Roth AE (1998) Learning in high stakes ultimatum games: An experiment in the Slovak Republic. Econometrica 66(3):569–596

    Article  Google Scholar 

  • Stahl DO, Haruvy E (2008) Level-n bounded rationality in two-player two-stage games. J Econ Behav Organ 65(1):41–61

    Article  Google Scholar 

  • Weibull JW (1995) Evolutionary Game Theory. The MIT Press, Cambridge, MA

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Law, Business and Economics, University of Bayreuth, Universitätsstraße 30, 95447, Bayreuth, Germany

    Dr. Christian Korth

Authors
  1. Dr. Christian Korth
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Christian Korth .

Rights and permissions

Reprints and permissions

Copyright information

© 2009 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Korth, C. (2009). Reciprocity—An Indirect Evolutionary Analysis. In: Fairness in Bargaining and Markets. Lecture Notes in Economics and Mathematical Systems, vol 627. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-02253-1_3

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-02253-1_3

  • Published:

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-02252-4

  • Online ISBN: 978-3-642-02253-1

  • eBook Packages: Business and EconomicsEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation