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Fairness, or Just Gambling on It? An Experimental Analysis of the Gift Exchange Game

Healy, Paul J. (2004) Fairness, or Just Gambling on It? An Experimental Analysis of the Gift Exchange Game. Social Science Working Paper, 1183. California Institute of Technology , Pasadena, CA. (Unpublished)

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Fehr, Kirchsteiger and Riedl experimentally test a labor market in which worker effort levels are chosen after wages are set. They observe high wages and effort levels in the repeated game, contrary to the equilibrium prediction. In a similar experimental test of lemons markets, Lynch Miller, Plott and Porter find support for the equilibrium prediction. The current paper finds more evidence of repeated game effects than in previous studies. In a model of incomplete information regarding the reciprocal nature of other players, the FKR design is shown to be conducive to reputation effects while the LMPP design is not.

Item Type:Report or Paper (Working Paper)
Additional Information:The author wishes to thank Charlie Plott and the Laboratory for Experimental Economics and Political Science at Caltech for financial and intellectual support. Jon Eguia, Isa Hafalir, Brian Rogers, Ming Hsu, Basit Kahn, and John Ledyard all provided useful assistance and commentary.
Group:Social Science Working Papers
Funding AgencyGrant Number
Caltech Laboratory for Experimental Economics and Political ScienceUNSPECIFIED
Subject Keywords:Gift exchange game, fairness, experiment, trust, reputation
Series Name:Social Science Working Paper
Issue or Number:1183
Classification Code:JEL: C72, C91, D83, H41
Record Number:CaltechAUTHORS:20170731-155937511
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:79634
Deposited By: Jacquelyn Bussone
Deposited On:01 Aug 2017 20:46
Last Modified:03 Oct 2019 18:22

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