Warning: file_put_contents(/opt/frankenphp/design.onmedianet.com/storage/proxy/cache/abccd18045e2edbee4555b0563c7d6aa.html): Failed to open stream: No space left on device in /opt/frankenphp/design.onmedianet.com/app/src/Arsae/CacheManager.php on line 36

Warning: http_response_code(): Cannot set response code - headers already sent (output started at /opt/frankenphp/design.onmedianet.com/app/src/Arsae/CacheManager.php:36) in /opt/frankenphp/design.onmedianet.com/app/src/Models/Response.php on line 17

Warning: Cannot modify header information - headers already sent by (output started at /opt/frankenphp/design.onmedianet.com/app/src/Arsae/CacheManager.php:36) in /opt/frankenphp/design.onmedianet.com/app/src/Models/Response.php on line 20
Fairness and Retaliation: The Economics of Reciprocity - American Economic Association
This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Summer 2000
  5. Fairness and Retaliation: The Economics of Reciprocity

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Fairness and Retaliation: The Economics of Reciprocity

  • Ernst Fehr
  • Simon Gächter
Journal of Economic Perspectives
vol. 14, no. 3, Summer 2000
(pp. 159–181)
Download Full Text PDF
(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 Gächter. 2000. "Fairness and Retaliation: The Economics of Reciprocity." Journal of Economic Perspectives 14 (3): 159–181. DOI: 10.1257/jep.14.3.159

JEL Classification

  • D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
  • D12 Consumer Economics: Empirical Analysis
  • Z13 Economic Sociology; Economic Anthropology