Handbook >> Trust, Fairness, and Reciprocity >> Useful concepts in Trust Fairness and Reciprocity >>
There is a clear distinction between reciprocal behavior and other types of other-regarding behavior: Reciprocal behavior is a response to actions of others that were aimed towards oneself, i.e. it is conditional on some proceeding choice that affects the individual. The perception of such choice of action undertaken by the others can either be positive or negative. If the individual benefited from the outcome of the action, she can return the kindness and thus make the others better off. This is called positive reciprocity. On the other hand, if the actions undertaken by the others were perceived to be harmful, she can retaliate, thus being negatively reciprocal. Both positively and negatively reciprocal actions are very likely to be costly to oneself.
Positive Reciprocity Examples:
Negative Reciprocity Examples:
eBay example of reciprocal behavior
Consider the eBay example mentioned in the introduction to fairness section. Suppose the following transaction has taken place. The buyer who won the auction has paid for the item and the seller has shipped it to the buyer who has already received it. Furthermore, suppose the item was in excellent condition as described in the online auction. At this point the interaction of both market sides could easily cease. But since the buyer is very satisfied with the item purchased she may decide to provide positive feedback on the seller. Notice that this action is costly to the buyer, since it takes some time to provide feedback and there is no immediate reward for doing so. This act of kindness is beneficial to the seller since the other potential buyers can see this feedback and, therefore, will be more willing to buy from him in the future. The seller can return the favor and provide positive feedback on the buyer. Such an action could be considered as positive reciprocity because it is costly to the seller and is undertaken as a response to preceding behavior of the buyer.
Indirectly reciprocal behavior: A driving example (more advanced)
The following example comes from a J. Cox "Trust and Reciprocity: Implications of Game Triads and Social Contexts ":
According to Fehr and Gachter [2000, pp. 159] ?Reciprocity means that in response to friendly actions, people are frequently much nicer and much more cooperative than predicted by the self-interested model; conversely, in response to hostile actions they are frequently much more nasty and even brutal.?
Examples of trusting and reciprocal behavior in an experimental setting
The concepts of trust and positive reciprocity in the moonlighting game are defined as follows. "Agent 1 undertakes an action that exhibits trust if the chosen action: ( a ) creates a monetary gain that could be shared with agent 2; and ( b ) exposes agent 1 to the risk of a loss of utility if agent 2 defects and appropriates too much of the monetary gain. Agent 2 undertakes an action that exhibits positive direct reciprocity if the chosen action: ( a ) follows a trusting action by agent 1; ( b ) gives agent 1 a monetary gain; and ( c ) is undertaken instead of an available alternative action that would produce outcomes preferred by agent 2 in the absence of the trusting action by agent 1."
Other examples of reciprocity in an experimental setting can be found in the following games: