Fairness and Retaliation: The Economics of Reciprocity
Journal
Journal of Economic Perspectives
ISSN
0895-3309
ISSN-Digital
1944-7965
Type
journal article
Date Issued
2000
Author(s)
Fehr, Ernst
;
Gaechter, Simon
Abstract
This article discusses the economic implications of reciprocity. A long-standing tradition in economics views human beings as exclusively self-interested. In most economic accounts of individual behavior and aggregate social phenomena, the vast forces of greed are put at the center of the explanation. However, many people deviate from purely self-interested behavior in a reciprocal manner. Reciprocity means that in response to friendly actions, people are frequently much nicer and much more cooperative than predicted by the self-interest model; conversely, in response to hostile actions they are frequently much more nasty and even brutal. There is considerable evidence that a substantial fraction of people behave according to this dictum: People repay gifts and take revenge even in interactions with complete strangers and even if it is costly for them and yields neither present nor future material rewards. This notion of reciprocity is thus very different from kind or hostile responses in repeated interactions that are solely motivated by future material gains.
Language
English
HSG Classification
not classified
Refereed
Yes
Publisher
American Economic Society
Publisher place
Nashville, Tenn.
Volume
14
Number
3
Start page
159
End page
181
Pages
23
Subject(s)
Division(s)
Eprints ID
10362