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.