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Inequality Aversion and Reciprocity in Moonlighting Games
Department of Economics, University of Mannheim,L7, 3-5, 68131 Mannheim, Germany
Centre for Experimental Economics, University of Copenhagen, Øster Farimagsgade 5, 1353 København K, Denmark
Economics Institute of the Academy of Sciences of the Czech Republic, P.O. Box 882 Politickych veznu 7, 111 21 Praha 1, Czech Republic
Department of Economics, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands
* Author to whom correspondence should be addressed.
Received: 16 September 2010; Accepted: 14 October 2010 / Published: 21 October 2010
Abstract: We study behavior in a moonlighting game with unequal initial endowments. In this game, predictions for second-mover behavior based on inequality aversion are in contrast to reciprocity. We find that inequality aversion explains only few observations. The comparison to a treatment with equal endowments supports the conclusion that behavior is better captured by intuitive notions of reciprocity than by inequality aversion. Extending the model by allowing for alternative reference points promises better performance, but leads to other problems. We conclude that the fact that inequality aversion often works as a good short-hand for reciprocity is driven by biased design choices.
Keywords: reciprocity; inequality aversion; altruism; moonlighting game
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MDPI and ACS Style
Engelmann, D.; Strobel, M. Inequality Aversion and Reciprocity in Moonlighting Games. Games 2010, 1, 459-477.
Engelmann D, Strobel M. Inequality Aversion and Reciprocity in Moonlighting Games. Games. 2010; 1(4):459-477.
Engelmann, Dirk; Strobel, Martin. 2010. "Inequality Aversion and Reciprocity in Moonlighting Games." Games 1, no. 4: 459-477.