Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Fairness and Retaliation: The Economics of Reciprocity
Journal of Economic Perspectives
(pp. 159–181)
(Complimentary)
Abstract
This paper shows that reciprocity has powerful implications for many economic domains. It is an important determinant in the enforcement of contracts and social norms and enhances the possibilities of collective action greatly. Reciprocity may render the provision of explicit incentive inefficient because the incentives may crowd out voluntary co-operation. It strongly limits the effects of competition in markets with incomplete contracts and gives rise to noncompetitive wage differences. Finally, reciprocity it is also a strong force contributing to the existence of incomplete contracts.Citation
Fehr, Ernst, and Simon G盲chter. 2000. "Fairness and Retaliation: The Economics of Reciprocity." Journal of Economic Perspectives 14 (3): 159–181. DOI: 10.1257/jep.14.3.159JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D12 Consumer Economics: Empirical Analysis
- Z13 Economic Sociology; Economic Anthropology