bargaining situations. There is also strong evidence that people exploit free-riding opportunities in voluntary cooperation games …. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained although punishment is …

This paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind … ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by … the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental …