Cost of action, perceived intention, positive reciprocity, and signalling model

This study experimentally tests the positive relationship between perceived intention and positive reciprocity by altering material-payoff structures. To design the treatments, we apply a signalling model to explain how the intention of an action is signalled and perceived. The model shows that the cost of an action positively relates to the perceived intention. The results from seventy-nine subjects who participated in this four-session hand-run experiment that was double-blindly organized between August - September 2011 support the positive relationship. Moreover, this study hypothesizes on consistent decisions across treatments with different levels of perceived intention, and the results support the hypotheses.