2010): “Sequential Reciprocity in Two-Player, TwoStage Games: An Experimental Analysis

We experimentally test Dufwenberg and Kirchsteiger’s (2004) the-ory of sequential reciprocity in a sequential prisoner’s dilemma (SPD) and a mini-ultimatum game (MUG). Data on behavior and first- and second-order beliefs allow us to classify each subject’s behavior as a material best response, a reciprocity best response, both, or none. We found that in both games the behavior of about 80 % of the first-movers was a material best response, a reciprocity best response, or both. The remaining 20 % of first-movers almost always made choices that were “too kind ” according to the theory of reciprocity. Second-mover behavior, in both games, was fully in line with the predictions of the theory. The average behavior and beliefs across subjects were 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. JEL classification: A13;C70;C92;D63. Keywords: sequential reci-procity; sequential prisoner’s dilemma; mini-ultimatum game