On the Nature of Reciprocity: Evidence fromthe Ultimatum Reciprocity Measure

We experimentally show that current models of reciprocity are in-complete in a systematic way using a new variant of the ultimatumgame that provides second-movers with a marginal-cost-free punish-ment option. For a substantial proportion of the population, the de-gree of first-mover unkindness determines the severity of punishmentactions even when marginal costs are absent. The proportion of thesesubjects strongly depends on a treatment variation: higher xed costsof punishment lead to harsher responses. The fractions of purely self-ish and inequity-averse participants are small and stable. Among thevariety of reciprocity models, only one accommodates (rather thanpredicts) parts of our ndings. The treatment effect is unaccountedfor. We discuss ways of incorporating our ndings into the existingmodels.