Department of Economics

We explore the effects of social distance on reciprocal behavior in an experiment conducted over the Internet on three continents and in classroom laboratory sessions conducted in Israel and Spain. Our design elicitsindividual behavior profiles over a range of contingencies, enabling us to identify heterogeneity among our participants. We find that many people show regard for others, even with the apparent social distance inherent with Internet interaction. Even in a virtual experiment, about 28% of the population demonstrate what appears to be positive reciprocity. The classroom laboratory sessions minimize (anonymous) social distance. While the rate of positive reciprocity is higher (43%) with less social distance, the patterns in behavior are surprisingly similar across treatments. To the extent that reciprocity could be a feature of virtual international business, perhaps cooperative behavior is sustainable.