EMOTION EXPRESSION AND INDIRECT RECIPROCITY

Abstract

This study explores how emotion expression (EE) can help promote positive indirect reciprocity while also breaking chains of negative indirect reciprocity. We report data from a two-stage dictator game and compare the decisions subjects make towards a third party both with and without the chance to express emotion. Standard economic models suggest opportunities to express emotion should have no impact on behavior. In sharp contrast to these predictions, we find that subjects who are treated unkindly behave more generously towards others in subsequent interactions if they have the opportunity to convey their emotions to a third party. Our findings have important welfare implications. In particular, they suggest that opportunities to express emotion can break negative reciprocity chains and promote generosity and social well-being even among those who have not themselves been previously well-treated. We argue that reference-dependent valuations can help to explain our results.