Hurtinghurts more than helpinghelps

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1 European Economic Review 46 (2002) Hurtinghurts more than helpinghelps Theo Oerman Department of Economics=CREED, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, Netherlands Received 1 April 2000; accepted 1 March 2001 Abstract Previous experimental work suggests that both a dislike for an unequal division of payos and intentionality play a role to explain reciprocal behavior. This paper focuses on intentionality, and in particular on the question of whether negative intentionality matters more than positive intentionality. Experimental evidence obtained in the hot response game suggests that this is the case: subjects are 67% more likely to reciprocate an intentional hurtful choice over an unintentional hurtful choice. Subjects are only 25% more likely to reciprocate an intentional helpful choice over an unintentional helpful choice. Additional evidence on the role of emotions helps explain this asymmetry between positive and negative intentionality. It is argued that a self-servingattributional style may be responsible for the observed phenomenon. c 2002 Elsevier Science B.V. All rights reserved. JELclassication: C70; C92 Keywords: Reciprocity; Intentionality; Self-servingbias; Experiment 1. Introduction There is an increasingfocus on the role of reciprocal behavior in economics. A series of theoretical papers by Akerlof (1982) and Akerlof and Yellen (1988, 1990) assumes that reciprocal behavior is at the heart of the explanation for involuntary unemployment. Experimental data obtained by Fehr et al. (1993, 1998) support these theoretical papers. Even in their double auction market experiments, gift exchange forces are strong enough to Tel.: ; fax: address: theoo@fee.uva.nl (T. Oerman) /02/$ - see front matter c 2002 Elsevier Science B.V. All rights reserved. PII: S (01)

2 1424 T. Oerman / European Economic Review 46 (2002) prevent market clearing. Employers oer higher than market clearing wages and employees reciprocate by choosingeort levels above those that maximize payos. Early work on reciprocal behavior in economics was silent about its nature. The recent debate yields two accounts of reciprocal behavior. The rst explanation proposes that players are concerned with the monetary consequences of their actions. However, they do not only care about their own payos, but also about the distribution of payos over all players. It is either assumed that they dislike unequal distributions of payos or that they are motivated by altruism. There is experimental evidence supportingthe distributional hypothesis (Bolton et al., 1998, 2000). Two theoretical models start from the premise that deviations from selsh behavior are best explained by distributional considerations (Fehr and Schmidt, 1999; Bolton and Ockenfels, 2000). The second explanation maintains that players try to assess the intention of the other player(s). They are inclined to reward players that intend to reward them and they are inclined to punish players that intend to punish them. There is experimental evidence supportingthis intentionality hypothesis (Blount, 1995; Charness, 1998). Two theoretical models are based on the assumption that deviations from selsh behavior are driven by assessments about the negative or positive intention of other players (Rabin, 1993; Dufwenbergand Kirchsteiger, 1998). Levine (1998), Falk and Fischbacher (1998) and Charness and Rabin (1999) develop more general models that allow for distributional and intentionality considerations simultaneously. Probably both considerations play a role in human behavior. This paper focuses on the role of intentionality. It uses a two-player sequential game to compare people s reactions to chance moves with reactions to choices made by human players. A new design makes it possible to disentangle the impact of intentional favorable actions from the impact of intentional unfavorable actions. For comparison, Blount (1995) only investigates the eect of negative intentionality in an ultimatum game. She compares the behavior of responders facinga proposed split made by a random number generator with the behavior of responders facinga proposed split made by an actual player. Rejection rates are substantially lower in her random treatment than in her interested party treatment. 1 Charness (1998) investigates the eect of intentionality in a simulated labor market. In his experiment employers oer a wage before employees choose their eort level. Employees provide more eort at high wages when the wage is employer-determined than when the wage is randomly determined. Conversely, employees provide less eort at low wages when the wage is set by the employer. Charness concludes that both positive 1 Blount reports the results of a third treatment, where the proposal has been made by a third party. This treatment yields similar retaliatory responses as the interested party treatment.

3 T. Oerman / European Economic Review 46 (2002) and negative reciprocity play a role in his experiment. None of these studies can directly compare the impact of negative intentionality with the impact of positive intentionality on people s inclination to reciprocate. The experimental evidence obtained in this paper is very clear: negative intentions provoke much stronger reciprocal responses than positive ones. As a second contribution, this paper provides independent measurements on subjects emotions and beliefs that make it possible to explain the asymmetric eect of intentionality. In particular, in case of an unfavorable rst move, second movers report (signicantly) stronger negative emotions after a human choice than after a chance move. In contrast, second movers report equally positive emotions after a favorable human choice and a favorable chance move. A higher intensity of the experienced emotion increases the likelihood of a reciprocal response. Thus, the asymmetric eect of intentionality on emotions can explain the dierent behavioral impact of positive and negative intentionality. In the concluding discussion, it will be argued that the self-servingbias phenomenon provides a coherent explanation for both the results on emotions and the results on reciprocal responses. There, also some related insights from the psychological literature will be discussed. There are a few other experimental studies that also shed some light on the eects of intentionality. In particular, Brandts and Charness (1999) investigate the role of intentions in a 3-stage cheap-talk experiment. In stage 1, the sender sends a non-bindingannouncement to choose either a favorable or an unfavorable choice in the second stage. The receiver observes the announcement before both players simultaneously play stage 2. In stage 3, the receiver chooses whether or not to punish an unfavorable action, or whether or not to reward a favorable action of the sender, both at positive costs. Brandts and Charness nd that many people send misleadingmessages. They observe more costly punishments if the sender s unfavorable choice followed a deceitful message than if it followed an honest message. The reward rate is relatively low but still signicant. Falk et al. (1999) show that in the ultimatum game the rejection rates of identical oers depend on the foregone opportunities. An oer of an unequal division of payos is more often rejected if the proposer could have made a more equal oer than if the proposer could only have made more unequal oers. 2 2 Bolton et al. (1998) is the one study that does not nd an eect of intentionality. A combination of three characteristics of their 2-players dilemma games may dampen the eects of intentionality. First, players choose simultaneously. Second, the reciprocatingplayer formulates a strategy: she indicates her choice for each of the other player s two possible choices. (Note that these two characteristics may alleviate emotions experienced by the reciprocatingplayer.) Third, subjects play the game twice with role reversal. Even though they play with a dierent partner and without information in between the games, subjects might think that they can balance a choice for one player-type with a choice for the other player-type.

4 1426 T. Oerman / European Economic Review 46 (2002) Table 1 The hot response game in decomposed form a Choice rst mover Payo rst mover Payo second mover Helpful 8 4 Hurtful 11 4 Choice second mover Reward 4 9 Cool 0 10 Punish 4 9 a First mover makes a choice before second mover. Second mover observes the choice of rst mover before she makes a choice. The payo for a player is the sum of the consequences of both choices. Payos are in Dutch guilders. The remainder of this paper is organized as follows. Section 2 presents the hot response game used in the experiment. Section 3 describes details of the design and the experimental procedure. Section 4 presents the results. Section 5 provides a concludingdiscussion. 2. The hot response game The asymmetric eect of positive and negative intentionality is assessed in the hot response game. In this game, the rst mover chooses between a helpful and a hurtful choice. The helpful choice gives the rst mover a payo of 8 guilders and the second mover a payo of 4 guilders. The hurtful choice gives the rst mover a payo of 11 guilders and the second mover a payo of 4 guilders. The second mover observes the choice of the rst mover, before she chooses between a cool, remunerative response and a reciprocal response. Cool gives the rst mover a payo of 0 guilders and the second mover a payo of 10 guilders. Hot responses are reward and punish. Reward gives the rst mover a payo of 4 guilders and the second mover a payo of 9 guilders. Punish gives the rst mover a payo of 4 guilders and the second mover a payo of 9 guilders. The choices and their consequences for the payos are summarized in Table 1. In the experiment, the game was presented in the decomposed form of Table 1. This decomposed form emphasizes the high degree of symmetry. On the one hand, there is symmetry between helpful and hurtful choices: the former gives 4 guilders to the other player, the latter takes 4 guilders from the other player. On the other hand, there is symmetry between rewarding and punishing: in order to punish, a player needs to sacrice 1 guilder to decrease the other player s payo by 4 guilders; in order to reward, a player needs to sacrice 1 guilder to increase the other player s payo by 4 guilders.

5 T. Oerman / European Economic Review 46 (2002) Rewardingand punishingare equally costly and equally eective. This game does not favor positive or negative intentionality. On the premise that both players are selsh and rational, rst mover will anticipate that second mover will choose cool independent of her own choice, and play hurtful. The unique subgame-perfect equilibrium involves unconditional strategies that lead to the outcome (hurtful, cool) Design and procedure The experiment was run by hand. Half of a group of subjects were allocated to the role of rst mover, the other half to the role of second mover. Subjects did not know with whom they were paired. The instructions of the game were distributed and read aloud. 4 The instructions were formulated in neutral language. When the rules of the game had been explained, subjects learned whether they had the role of rst mover or the role of second mover. Subjects received a payo table like Table 1, but with neutral labels: player X (instead of rst mover) chose between X1 (instead of helpful) and X2 (instead of hurtful). The choice of player X was communicated to player Y (instead of second mover). Player Y chose between Y1 (instead of reward), Y2 (instead of cool) and Y3 (instead of hurtful). It was emphasized that the game was played only once. When the game was nished, all players lled out a questionnaire. When subjects had completed the questionnaire, they were paid in private. Only at that time did the rst mover learn the choice of the second mover. The experiment consisted of two treatments. In Nature the choice of rst mover was determined by her throw of a six-sided die: if she threw 1, 2 or 3, she chose helpful and otherwise she chose hurtful. In Flesh and Blood rst mover actually chose between helpful and hurtful. The eect of positive intentionality can be assessed by comparingthe probability of a reward given a helpful choice in Flesh and Blood and this probability in Nature. Likewise, the eect of negative intentionality appears from the dierence in probability of a punishment given a hurtful choice by Flesh and Blood and by Nature. A comparison of both eects will reveal any asymmetry between positive and negative intentionality. 3 There is another outcome (helpful, cool) that can be supported as a Nash equilibrium that involves the use of an incredible threat. If rst mover expects that a helpful choice will elicit a cool response, while a hurtful choice will trigger a punishment, then her best response is to choose helpful. 4 A translation of the (Dutch) instructions, the questionnaire and the data are attached to the internet version of this paper, that can be downloaded from people=theoo.htm.

6 1428 T. Oerman / European Economic Review 46 (2002) The role of emotions was investigated with the help of the questionnaire. In this questionnaire, second movers were asked to think back to the moment when they were informed about the decision of the rst mover. For each of the negative emotions anger, annoyance, disappointment and contempt and each of the positive emotions gladness, relief, appreciation and feeling lucky second movers reported whether they had experienced it. If they answered yes, they also indicated the intensity of the emotion on a 1 (= low level of intensity) to 7 (= high level of intensity) scale. Second movers were not directly asked to report their emotions when they were informed about the choice of rst mover. If they had reported their emotions before they had made their own choice, there would have been a danger of an experimenter induced bias: perhaps some subjects would then think that they should reciprocate simply because they reported an emotion. Furthermore, each second mover was asked to think back to the moment when the choice of rst mover was communicated, because the emotion may already have subsided at the time a subject lls out the questionnaire. A similar procedure to elicit emotions is used by Sonnemans (1991), Sonnemans and Frijda (1995) and Bosman and van Winden (2000). Players were also asked to report their beliefs. In the questionnaire, all rst movers were asked to report their beliefs of the second mover s choice given their own choice in terms of probabilities. This information helps to evaluate whether rst movers anticipated the eects of intentionality correctly. Only some of the second movers in Flesh and Blood (16 out of 28) were asked to report their beliefs about the choice of their paired rst mover before they were informed about this choice. 5 The information about second mover s beliefs makes it possible to see whether surprise aects the intensity of an emotion. Second mover may experience a stronger negative emotion after a hurtful choice if he did not expect such a choice. Likewise, he may experience a stronger positive emotion after a helpful choice if he did not expect it. A payo for the accurateness of their beliefs was used to encourage players to report their beliefs seriously. The payo was determined by the incentive compatible Quadratic Scoringrule. The rst movers reported their beliefs about the choice of the second movers before the actual choice of the second mover was communicated to them. Let p 1 denote the reported probability of the second mover playingreward (Y1), p 2 the reported probability of the second mover playingcool (Y2) and p 3 the reported probability of the 5 By comparingthe choices of second movers reportingbeliefs with the choices of second movers not reportingbeliefs it can be assessed whether formulatingbeliefs has an undesired eect on choices. For example, it could be that subjects who formulate beliefs rationalize their choices. A similar problem cannot occur for rst movers. First movers only reported their beliefs after they had made a choice. At the time of choosingthey did not know that they would be asked to report their beliefs.

7 T. Oerman / European Economic Review 46 (2002) second mover playingpunish (Y3) (thus, p 1 + p 2 + p 3 = 1). If second mover actually chose Y j (1 j 3); rst mover received a Quadratic Scoringrule payo in Dutch cents of QS( j): 3 QS(j) = p j 100 pi 2 : (1) i=1 The Quadratic Scoringrule payo for second movers who reported their belief about the choice of rst mover was determined as follows. Let q 1 denote second mover s reported probability that rst mover chose helpful. If rst mover actually chose helpful, then second mover received a payo of 400q 1 200q1 2. If rst mover actually chose hurtful, then second mover received a payo of q 1. These second movers were provided with a table based on the formula of the scoringrule. This table displayed the payo of each (integer) reported probability q 1 between 0% and 100% when rst mover chose helpful and when she chose hurtful. Note that for both rst and second movers the Quadratic Scoringrule payo was in the range [0; 200]. Subjects were told that their expected payo was highest if they reported their probabilities truthfully. It was emphasized that it was not important to have further mathematical insight in the formula. The Quadratic Scoring rule is discussed in Oerman (1997). Subjects. Subjects were recruited at the University of Amsterdam. In total 112 subjects participated in this experiment. The experiment was carried out in 8 sessions, of 12 or 16 subjects each: 56 subjects participated in Nature and 56 participate in Flesh and Blood. 6 Readingthe instructions, playingthe game and lling out the questionnaire took about minutes. Subjects earned on average 10 guilders for their decisions in the hot response game and 1.30 guilders for reporting their beliefs Results This section is organized as follows: rst, the eects of positive and negative intentionality on reciprocal behavior are compared. Then the potential role of emotions is investigated. Finally, the focus will be on subjects beliefs. There exists only a mild eect of positive intentionality in the hot response game. As can be inferred from Table 2, second movers reciprocate 75% of the intentional helpful choices versus 50% of the unintentional helpful choices. This dierence of 25% misses conventional levels of signicance 6 Prior to this experiment subjects participated in a pyramid game. There was no connection between the two experiments: in the pyramid game, there was no potential role for reciprocal behavior and subjects only received information about their own payos. 7 At the time of the experiment one US dollar was worth about two Dutch guilders.

8 Table 2 Asymmetry of punishments and rewards a Punish Cool Reward Nature Flesh Mann Nature Flesh Mann Nature Flesh Mann and Whitney and Whitney and Whitney Blood Z Blood Z Blood Z Helpful 0% (0=16) 0% (0=16) % (8=16) 25% (4=16) 1:44 50% (8=16) 75% (12=16) 1:44 Hurtful 16.7% (2=12) 83.3% (10=12) 3: % (7=12) 16.7% (2=12) 2:06 25% (3=12) 0% (0=12) 1:81 a Indicates signicance at 5% level; at 1% level T. Oerman / European Economic Review 46 (2002)

9 T. Oerman / European Economic Review 46 (2002) (p =0:15 for the Mann Whitney test). In contrast, the eect of negative intentionality appears to be pretty strong. Second movers reciprocate 83.3% of the intentional versus 16.7% of the unintentional hurtful choices. This dierence of 67% is signicant (p 0:01 for the Mann Whitney test). The eect of negative intentionality is further underlined by the result that hurtful choices in Flesh and Blood never trigger rewards, while still 25% of the hurtful choices in Nature are followed by a reward. 8 Negative intentionality matters more than positive intentionality. This does not imply that intentionality is the only cause for deviations from selshness. If that were true, no reciprocal choices should be observed in Nature. Even in Nature, in 46% of the cases second movers do not play cool. Distributional considerations matter. It is less clear how exactly distributional concerns matter. The 50% rewards after a helpful choice in Nature are consistent with both altruism and dislike of unequal payos. The 16.7% punishments after a hurtful choice in Nature are consistent with dislike of unequal payos but not with altruism. The 25% rewards in Nature after a hurtful choice are consistent with altruism but not with dislike of unequal payos. Only these few rewards after a hurtful choice are not consistent with the distributional theories of Fehr and Schmidt (1999) and Bolton and Ockenfels (2000). How should the asymmetric eect of positive and negative intentionality be explained? In the followinganalysis the roles of emotions and beliefs will be discussed. A positive emotion is calculated as the average of the emotions reported for gladness, relief, appreciation and feeling lucky; a negative emotion is calculated as the average of the emotions reported for anger, annoyance, disappointment and contempt (cf. Sonnemans, 1991, p. 149 and pp ). Emotions are rated on a 0;:::;7 scale (0 denotes no emotion, 1 denotes emotion with low intensity and 7 with high intensity). The following classication is used: if the average emotion equals 0, there is no emotion, if the average emotion is larger than 0 but smaller than or equal to 3.5, it is classied as a weak emotion, and if the average emotion is larger than 3.5, it is classied as a strongemotion. From Table 3 it can be inferred that helpful choices always lead to positive emotions in Nature as well as in Flesh and Blood. A remarkable feature is that the intensity of a positive emotion after a helpful choice does not depend on the intentionality of the choice: there is no systematic dierence between the intensity of a positive emotion in Flesh and Blood and in Nature (Mann Whitney rank test: m =16;n= 15; p =0:89). The picture is rather dierent for hurtful choices. A hurtful choice triggers more often a negative emotion 8 There is no systematic dierence between choices of second movers who report beliefs and those who do not report beliefs. Therefore, all choices of second movers are pooled in the analysis.

10 1432 T. Oerman / European Economic Review 46 (2002) Table 3 Eects of rst movers choices on second movers emotions Helpful choice Hurtful choice Nature Flesh and Nature Flesh and Blood Blood Positive emotion No 0% 0% 90% 75% Weak 60% 56.3% 10% 25% Strong40% 43.8% 0% 0% Average Total n =15 m =16 n =10 m =12 Negative emotion No 100% 100% 18.2% 8.3% Weak 0% 0% 81.8% 33.3% Strong0% 0% 0% 58.3% Average Total n =15 m =16 n =11 m =12 Table 4 Eect of emotion second mover on choice second mover Nature Flesh and Blood Reward Cool Punish Total Reward Cool Punish Total (%) (%) (%) (n) (%) (%) (%) (n) Positive emotion No Weak Strong Negative emotion No Weak Strong in Flesh and Blood than in Nature. If an emotion is triggered, it is always a weak emotion in Nature, while the larger part is a strong emotion in Flesh and Blood. In fact, after a hurtful choice a signicantly stronger negative emotion is triggered in Flesh and Blood than in Nature (Mann Whitney rank test: m =12;n= 11; p 0:01). Table 4 shows the consequences of the second movers experienced emotions for their choices. A higher intensity of a positive emotion increases the likelihood of a reward both in Nature and in Flesh and Blood. Similarly, a higher intensity of a negative emotion increases the likelihood of a punishment both in Nature and Flesh and Blood. Nevertheless, subjects show more restraint in respondingto their emotions when the choice of rst mover is unintentional. Given an emotion, they reciprocate less in Nature than in Flesh and Blood.

11 T. Oerman / European Economic Review 46 (2002) Table 5 Realized and expected payos and beliefs rst mover a Choice Payo rst mover Choice Probability rst mover Wilcoxon rst second Z mover Expected Realized mover Reported Actual (%) (%) Nature Helpful Reward :26 Cool :26 Punish :37 Hurtful Reward :13 Cool :39 Punish :31 Flesh and Helpful Reward :36 Blood Cool :78 Punish :93 Hurtful Reward :52 Cool :98 Punish :98 a The expected payo for rst mover is calculated on the basis of her choice and her reported probabilities. The Wilcoxon rank test compares reported probabilities with actual probabilities. Actual probabilities are computed on the basis of second movers choices. Indicates signicance at 1% level; at 5% level. Subjects reported beliefs are also useful to understand the asymmetry of positive and negative intentionality. The beliefs of second movers help to evaluate a potential eect of surprise on the intensity of the experienced emotion. A stronger negative emotion may be experienced if the second mover expects a helpful choice and then learns that rst mover has actually chosen hurtful (cf. Frijda, 1986, p. 292). The data for hurtful choices suggest that second movers experience stronger negative emotions when they estimate the probability of a helpful choice to be higher (Spearman rank correlation coecient between reported probability of a helpful choice and negative emotion is 0:65; n =6; p =0:16). Likewise, a helpful choice may trigger a stronger positive emotion if it is not expected. For helpful choices, the reported positive emotion scarcely decreases when the probability of a helpful choice increases (Spearman rank correlation coecient between reported probability of a helpful choice and positive emotion is only 0:17; n = 10; p =0:64). Surprise seems to matter more for negative emotions than for positive emotions. On average, second movers are remarkably accurate when predicting the choice of rst mover. The average reported probability of a helpful choice is 56.8%, while in Flesh and Blood 57.1% of the rst movers actually choose helpful. The beliefs of rst movers help to evaluate whether they anticipate the eects of intentionality. Table 5 reports the beliefs, expected and realized payos of rst movers. In Nature, rst movers have on average unbiased beliefs about the choices of second movers. The accurateness of rst movers

12 1434 T. Oerman / European Economic Review 46 (2002) in Nature contrasts sharply with the biases in rst movers beliefs in Flesh and Blood. There, rst movers substantially underestimate the probability of a reciprocal response. It is nevertheless strikingthat rst movers seem to anticipate some degree of asymmetry between positive and negative intentions. First movers provide similar estimates for the probability of a reward after a helpful choice in both treatments. On the other hand, rst movers in Flesh and Blood estimate the probability of a punishment after a hurtful choice to be higher than rst movers in Nature. In Flesh and Blood rst movers expect on average a slightly higher payo from the hurtful choice than from the helpful choice. The actual responses of second movers are not in accordance with this belief. Helpful choices are substantially more remunerative than hurtful choices. The bias in judging the eect of intentionality is costly for rst movers. 5. Concluding discussion The evidence in this experiment shows that negative intentionality matters more than positive intentionality. People react much stronger to an intentional hurtful choice than to an intentional helpful choice. In the following, it is argued that a self-serving bias provides a possible explanation for the asymmetric eect of intentionality. Individuals prefer to have a positive self-image. They attribute good events to internal causes, such as great skill, personal attractiveness or high intelligence. They attribute bad events to external causes, such as uncontrollable circumstances or other persons failures. This attributional style is called the self-servingbias. It helps people to boost their self-image (cf. Sedikides et al., 1998; Brown, 1986). Other factors also contribute to a positively biased self-image. For example, when their self-image is low or when they feel threatened, people tend to judge themselves by comparing their own qualities with those of others who score less on the qualities under consideration. This process of downward social comparison helps them to enhance their self-image (Wills, 1981). As a consequence, people entertain unduly positive beliefs about themselves. Social psychological research shows that typically a considerable majority of respondents rate themselves in the top 50% part of the population in various desirable skills and qualities. 9 For example, Svensson (1981) reports that 93% of American drivers and 69% of Swedish drivers think that they 9 Depressed people seem to form an interestingexception: they tend to have a realistic self-image (cf. Lewinsohn et al., 1980).

13 T. Oerman / European Economic Review 46 (2002) belongto the top 50% of most skillful drivers (for a list of similar examples and references, see Babcock and Loewenstein, 1997). 10 People s self-servingattributional style provides an argument for an asymmetric eect of intentions. The self-servingbias allows people to take credit for the helpful action of someone else. After all, other people like to help someone as nice as oneself. Helpingyou provides them an intrinsic payo, makinga reciprocal gift less necessary. A helpful action ts very well in people s positive view of themselves and is no reason for surprise. In accordance with this conjecture, subjects report an equally intense positive emotion after an intentional and an unintentional helpful choice. Nevertheless, subjects show more restraint in Nature than in Flesh and Blood when respondingto a positive emotion. This latter feature explains the mild eect of positive intentionality on the probability of reciprocation. On the other hand, the self-servingbias allows people to blame the other for an intentionally hurtful action. Such an action is in sharp conict with the positive self-image of the individual. People with high self-esteem will feel insulted by an intentional hurtful choice. Hurt pride will provoke a desire for revenge. In contrast, an unintentional hurtful choice will hurt less because there is nobody to blame for. 11 Indeed, subjects report more intense negative emotions when a hurtful choice is intentional than when it is unintentional. In addition, they show more restraint in respondingto their emotion when the hurtful choice was unintentional. Both an increase in the negative emotion experienced and a decrease in the restraint of respondingto the emotion explain the strongeect of negative intentionality on the probability of reciprocation. 12 Of course, at this early stage the existence of other plausible explanations cannot be excluded. The reported emotions provide indirect support for the explanation oered by the self-servingbias. But it would be interestingto test the self-servingbias hypothesis more directly. One way is to obtain an 10 There are some interestingimplications of the self-servingbias for economics. The self-servingbias explains how costly impasses in bargainingevolve. Bargainers perceptions of a fair outcome of the bargaining process are distorted in the direction of their own self-interest. Those bargainers who are prepared to give up money for avoiding unfair settlements are likely to get stuck in costly impasses (Babcock et al., 1995; Babcock et al., 1996). It has also been suggested that the self-serving bias explains part of the high failure rate of new businesses (Camerer, 1997). 11 Sonnemans and Frijda (1995) ask subjects to report on recalled emotion instances. For 83% of the cases that a subject reports anger, another person was held responsible for the situation. The intensity of the reported anger increases with the blameworthiness of the other. 12 Previous experimental work on the self-servingbias has been carried out in a natural rich context. It was believed that the self-servingbias was less likely to manifest itself in a pronounced way in an experiment designed along the clean, context free lines of the experimental methodology typically used in economics (e.g., Babcock et al., 1995). This belief is perhaps a bit pessimistic: Even in the abstract settingof the present experiment a pronounced eect of the self-servingbias is observed.

14 1436 T. Oerman / European Economic Review 46 (2002) independent measure of a subject s self-servingbias. If subjects who suer most from a self-servingbias are those who react strongest to intentional hurtful actions, the self-servingbias explanation could be put forward with more condence. In addition, it would also be informative to ask subjects why they experience the emotions that they report. 13 A remarkable result is that rst movers do not suciently anticipate that it makes a dierence for second movers whether their choice was intentional or not. Especially negative intentionality has a larger impact on the probability of reciprocation than expected. This ndinghas some relevance for people in bargaining situations. People should be careful not to oend the opponent, because intentional hurtful choices trigger more reciprocal responses than they tend to expect. By and large, the evidence of this experiment turns the balance in favor of a nice view of people when intentionality does not play a role. In Nature forced helpful choices are often rewarded but never punished. Hurtful choices are sometimes punished but also sometimes rewarded. Overall, people are more often nice than mean in this treatment. This eect is more than oset when intentionality is introduced: in Flesh and Blood intended helpful choices are often rewarded and never punished; on the other hand, intended hurtful choices are even more often punished and never rewarded. When intentionality plays a role, an uglier view of mankind results. This nding may shed some light on results for other games that may seem paradoxical at rst sight. For example, it may help explain why public good games elicit nicer behavior than ultimatum games. The simultaneous choice structure of most public good games diminishes the role of intentionality, whereas the sequential choice structure of ultimatum games stimulates the impact of intentionality. In accordance with this conjecture, Bardsley (2000) nds more cooperation in a simultaneous public good game than in a sequential public good game with the same payo function. References Akerlof, G.A., Labor contracts as a partial gift exchange. Quarterly Journal of Economics 97, Akerlof, G.A., Yellen, J.L., Fairness and unemployment. American Economic Review 78, Akerlof, G.A., Yellen, J.L., The fair-wage eort hypothesis and unemployment. Quarterly Journal of Economics 195, Babcock, L., Loewenstein, G., Explainingbargainingimpasse: The role of self-serving biases. Journal of Economic Perspectives 11, Babcock, L., Loewenstein, G., Issacharo, S., Camerer, C., Biased judgments of fairness in bargaining. American Economic Review 85, Babcock, L., Wang, X., Loewenstein, G., Choosingthe wrongpond: Social comparisons that reect a self-servingbias. Quarterly Journal of Economics 111, I am grateful to an anonymous referee and the editor for these suggestions.

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