It’s No Problem: Using Reverse Bargaining to Manage the Threat of Second-order Opportunism in Social Exchange

• In Event: 4153 - Perspectives on Interaction, Conflict, and Discourse

Abstract

In many routine interactions, an actor who initiates social exchange can rest assured that the benefits they provide will be reciprocated, not only because the person receiving the bene- fits has an internalized sense of obligation to reciprocate (Gouldner 1960), but also because most exchanges occur in the context of communities that enforce reciprocity norms through reward and sanctioning mechanisms (Simpson and Willer 2015). However, a ubiquitous feature of social exchange is that givers of benefits vigorously downplay the value of what they are providing and the need to reciprocate (Leifer 1988). We refer to this language as reverse bargaining. Insofar as givers provide benefits because they are motivated by reciprocity, the ubiquity of reverse bargaining is puzzling. To address this puzzle, we develop a theory that builds on an under-recognized implication of extant theories of reciprocity, which is that they enable givers to exploit receivers, even in routine interactions. Under these conditions, reverse bargaining enables givers to effectively suppress suspicions of ulterior motive. Our model of reciprocity suggests that actors are neither as benevolent and exploitable as suggested by theories that assume an internalized sense of obligation, nor are they as opportunistic and cynical as suggested by theories that emphasize the role of sanctioning mechanisms. Results from two online experiments support our theory.

Authors

• Simon Friis, Massachusetts Institute of Technology

• Ezra W. Zuckerman, Massachusetts Institute of Technology