Does attachment to money affect reciprocity behaviour?

Abstract

In this study, we test experimentally how a player who must decide how much money to transfer back in a trust game is affected by the experiment’s monetary incentive. We find that positive reciprocity or altruism in a trust game is affected by the player’s attachment to the money he received. We also argue that in a trust game played with virtual money, the players are affected by their willingness to punish the other player, consistent with the ‘altruistic punishment’ hypothesis.

Keywords:

• trust game
• monetary incentive
• experiment
• reciprocity
• altruism

JEL Classification:

• C91
• D03

Notes

¹  New Israeli Shekel. The exchange rate at the time of the experiment was approximately NIS 3.5 = USD 1.

²  The experimenter returned to the same class 2 weeks after he distributed the money, so the participants did not need to make any additional effort.