Positive reciprocity when motives are ambiguous

Abstract We present and test a model of reciprocity in which people are more likely to repay good treatment to the extent they judge it as motivated by true caring rather than tactical self-interest. The model’s key contributions stem from how it handles ambiguously motivated behavior. It allows people to maintain divergent hypotheses: They can view behavior as driven by caring, self-interest, or a mix thereof. In contrast, previous analyses resolve rather than maintain ambiguity. They treat caring and self-interest as mutually exclusive hypotheses, and require that people commit to one and dismiss the other. By more realistically handling ambiguity, our model yields three benefits. First, it accommodates intuitive patterns of play that existing analyses do not and which we experimentally corroborate. These patterns reflect intermediate inclinations to reciprocate ambiguously motivated positive behavior. Second, it challenges conventional interpretations of long-studied phenomena, including unraveling in finitely iterated prisoners’ dilemmas, substantial offers in ultimatum games, and gift exchange. Third, it highlights how diversity in perceptions – the same action can appear generous to one person and miserly to another – is empirically consequential. Under conventional interpretations and without accounting for diverse perceptions, the aforementioned phenomena have been viewed as inconsistent with a taste for repaying good treatment. Our model shows that they are entirely consistent with a nuanced form of this taste: a desire to repay good treatment that seems to largely reflect genuine caring.