Intrinsic and instrumental reciprocity: An experimental study

- We find a reciprocal behavior in an indefinitely repeated veto game to be instrumentally motivated.
- We offer some methodological improvements in conducting indefinitely repeated games in the lab.
- We find that reciprocating kindness does not explain a substantial portion of subject behavior.

In the context of an indefinitely repeated veto game, we devise an experiment to distinguish between alternative explanations of generous behavior (accepting negative payoffs): altruism, intrinsic backward-looking reciprocity, and instrumental forward-looking reciprocity. Our results are broadly consistent with the hypothesis that observed sacrifices are motivated by equilibrium selfish, forward-looking reciprocal behavior although we find a more subtle way in which past kindness affects behavior.