Reciprocity and Giving in a Consecutive Three-Person Dictator Game with Social Interaction

type="main" xml:id="geer12013-abs-0001"> <title type="main">Abstract</title> <p>We study pure indirect reciprocity by setting up a modified dictator game with three players A, B, and C acting sequentially. Subject A takes a share of a pie and passes the rest to subject B, while B divides the rest between herself and C. We find that this consecutive three-person dictator game increases generosity compared with the traditional two-person dictator game. We analyze the influence of social interaction and uncertainty. In treatments with certainty we observe pure indirect reciprocity: B indirectly reciprocates for A's behavior in the decision on how generous to be to C.