Sequential reciprocity in two-player, two-stage games: an experimental analysis
Faculty of Applied Economics
Antwerp :UA, 2007
Research paper / UA, Faculty of Applied Economics , 2007:26
University of Antwerp
We experimentally test Dufwenberg and Kirchsteigers (2004) theory of sequential reciprocity in a sequential prisoners dilemma (SPD) and a mini-ultimatum game (MUG). Data on subjects behavior and firstand second-order beliefs allow us to classify their behavior as a material best response, a reciprocity best response, both, or none. In both games, about 80% of the first-movers behavior is a material best response, a reciprocity best response, or both. The remaining 20% of first-movers almost always make choices that are too kind according to the theory of reciprocity. Second-movers behavior, in both games, is fully in line with the predictions of the theory. Average behavior and beliefs, across subjects, are found to be compatible with a sequential reciprocity equilibrium in the SPD, but not in the MUG. We also found first- and second-order beliefs to be unbiased in the SPD, and nearly unbiased in the MUG, with the exception that first-movers in the MUG significantly overestimated the second-movers rejection rate of unequal offers.