On the Nature of Reciprocity : Evidence from the Ultimatum Reciprocity Measure

We experimentally show that current models of reciprocity are in-complete in a systematic way using a new variant of the ultimatum game that provides second-movers with a marginal-cost-free punish-ment option. For a substantial proportion of the population, the de-gree of rst-mover unkindness determines the severity of punishment actions even when marginal costs are absent. The proportion of these subjects strongly depends on a treatment variation: higher fixed costs of punishment lead to harsher responses. The fractions of purely self-ish and inequity-averse participants are small and stable. Among the variety of reciprocity models, only one accommodates (rather than predicts) parts of our findings. The treatment effect is unaccounted for. We discuss ways of incorporating our findings into the existing models