Social Distance and Reciprocity

Abstract

Contrary to the predictions of non-cooperative game theory, trust and reciprocity are commonly reported in simple games. We conduct a one-shot investment game to examine how social distance affects behavior in two-person exchanges. Two aspects of social distance are examined: ex post revelation of complete information on the second playerâ??s choice set and ex post revelation of information regarding the second playerâ??s identity. The results indicate that reciprocity is not affected by knowledge of the choice set, but depends critically on the possible revelation of the decision makerâ??s identity. That is, the possibility that the second playerâ??s identity (picture) is revealed to his/her counterpart has a profound effect on the degree of reciprocity extended.