Tit for tat: Foundations of preferences for reciprocity in strategic settings

Uzi Segal, Joel Sobel*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

70 Scopus citations

Abstract

This paper assumes that in addition to conventional preferences over outcomes, players in a strategic environment have preferences over strategies. It provides conditions under which a player's preferences over strategies can be represented as a weighted average of the utility from outcomes of the individual and his opponents. The weight one player places on an opponent's utility from outcomes depends on the players' joint behavior. In this way, the framework is rich enough to describe the behavior of individuals who repay kindness with kindness and meanness with meanness. The paper identifies restrictions that the theory places on rational behavior.

Original languageEnglish
Pages (from-to)197-216
Number of pages20
JournalJournal of Economic Theory
Volume136
Issue number1
DOIs
StatePublished - Sep 2007
Externally publishedYes

Funding

FundersFunder number
SSHRCC
National Science Foundation

    Keywords

    • Extended preferences
    • Game theory
    • Reciprocity
    • Representation theorems

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