Separating Gratitude from Guilt in the Laboratory

In contrast to guilt based reciprocity, which hypothesizes that reciprocity is an increasing function of the 2 order expectation of trustor’s expectation for reciprocation, we test for reciprocity which is a decreasing function of trustees 2 order expectations, i.e., that people can reciprocate out of gratitude. To unambiguously decrease 2 order expectations in our treatment, we broke up a standard trust game into a two stage dictator game where the 1 round dictator was not informed about the possibility of a 2 round. Furthermore, the 2 dictator could “silently exit” by not sending anything to the 1 round dictator. We found a significant increase in both the amount of reciprocation and the number of people reciprocating as compared to our standard trust and dictator games controls. The strength of the positive reciprocity observed rules out inequality aversion as a cause. We found support for our hypothesis in the prior data of others who tested for guilt based reciprocity. Our result also seems to reconcile conflicting results in that literature. To our knowledge, this is the first paper which shows that kindness distinct from guilt, shame, efficiency and inequity aversion could be a motive for reciprocity. Our strong positive reciprocity result also suggests why it has been difficult to find in the past. JEL Codes: C91, C72, D64