Procedural Concerns and Reciprocity

Different to other scientific disciplines traditional economic theory has remained remarkably silent about procedural aspects of strategic interactions. Much to the contrast, among psychologists there is by now a broad consensus that not only expected outcomes shape human behavior, but also procedures that are used to take decisions. It is argued that procedural concerns are especially pervasive in the resolution of conflicts. In our paper we show that procedural concerns are in fact an inherent feature of the interaction of reciprocal agents. More precisely, using Dufwenberg and Kirchsteiger (2004)’s theory of sequential reciprocity we demonstrate that procedural choices determine the responsibility that people have for outcomes. The responsibility for outcomes in turn influences peoples’ evaluations of intentions and, hence, subsequent reactions. Two applications are discussed to highlight the impact and importance of procedural concerns in strategic interactions.