The moonlighting game: An experimental study on reciprocity and retribution

We introduce the moonlighting game. Player A can take money from or pass money to player B, who can either return money or punish player A. Thus, our game allows to study both positively and negatively reciprocal behaviour. One-shot experiments were conducted with and without the possibility of making non-binding contracts beforehand. We find that retribution is much more compelling than reciprocity. Although contracts are not binding they increase trust, but we do not find evidence that they also encourage reciprocity.