A theory of sequential group reciprocity
Alejandro T. Moreno-Okuno
Received: 9 November 2015 / Revised: 13 July 2017 / Accepted: 19 July 2017 /
Published online: 22 August 2017
Ó The Author(s) 2017. This article is an open access publication
Abstract Games that appear to be independent, involving none of the same players,
may be related by emotions of reciprocity between the members of the same groups.
In the real world, individuals are members of groups and want to reward or punish
those groups whose members have been kind or unkind to members of their own. In
this paper, we extend Dufwenberg and Kirchsteiger’s model of sequential
reciprocity (Games Econ Behav 47(2):268–298, 2004) to groups of individuals and
deﬁne a new ‘‘sequential group reciprocity equilibrium’’ for which we prove its
existence. We study the case of two games with two players in each game, where
each player belongs to the same group as a player in the other game. We show that
when the payoffs of one game are much higher than the payoffs of the other, the
outcome of the game with higher payoffs determines the outcome of the other game.
We also ﬁnd that when the payoffs are very asymmetric, the outcome where the sum
of the payoffs is maximized is a sequential group reciprocity equilibrium.
Keywords Fairness Groups Psychological games Game theory
JEL classiﬁcation A12 D63 C70
& Alejandro T. Moreno-Okuno
Universidad de Guanajuato, Guanajuato, Mexico
Lat Am Econ Rev (2017) 26:6