Reputation or Reciprocity? An Experimental Investigation
CESifo, Munich, 2001
CESifo Working Paper No. 496
![](https://cesifo.org/DocImg/cesifo_wp496.jpg?c=1689236986)
Recent evidence highlights the importance of social norms in many economic relations. However, many of these relationships are long-term and provide repeated game incentives for performance. We experimentally investigate interaction effects of reciprocity and repeated game incentives in two treatments (one-shot and repeated) of a gift-exchange game. In both treatments we observe reciprocity, which is strengthened in the repeated game. A detailed analysis shows that in the repeated game some subjects imitate reciprocity. Thus, reciprocity and repeated game incentives reinforce each other. Observed behaviour is robust against experience. We conclude that a long-term interaction is a ?reciprocity-compatible? contract enforcement device.