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Contracting Under Reciprocal Altruism

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  • Shchetinin, Oleg

Abstract

I develop a model of contracting under reciprocal altruism accounting for some evidence which is paradoxical from the point of view of neoclassical models with selfish actors. My model predicts the crowding-out effect observed in the Trust Game with the possibility of a fine; for the Control Game the model predicts that an equilibrium can exhibit "no effect of control", "hidden cost of control", or "positive effect of control", depending on the characteristics of the actors, as observed in the lab. This suggests that reciprocal altruism modeling could be fruitful more generally in applications of contract theory.

Suggested Citation

  • Shchetinin, Oleg, 2009. "Contracting Under Reciprocal Altruism," MPRA Paper 13457, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13457
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    References listed on IDEAS

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    Cited by:

    1. Danilov, Anastasia & Sliwka, Dirk, 2013. "Can Contracts Signal Social Norms? Experimental Evidence," IZA Discussion Papers 7477, Institute of Labor Economics (IZA).
    2. Bassi, Matteo & Pagnozzi, Marco & Piccolo, Salvatore, 2014. "Optimal contracting with altruism and reciprocity," Research in Economics, Elsevier, vol. 68(1), pages 27-38.
    3. Shchetinin, Oleg, 2012. "Motivated Agents with Career Concerns: Signalling skills and organizational involvement," Working Papers in Economics 524, University of Gothenburg, Department of Economics.

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    More about this item

    Keywords

    Reciprocal Altruism; Extrinsic and intrinsic motivation; Behavioral Economics; Signaling; Contract Theory;
    All these keywords.

    JEL classification:

    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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