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It's About Showing Good Faith, Not Avoiding Shows of Weakness: Reworking Leifer's “Local Action” to Build a Robust Theory of Reciprocity

Simon Friis ^a

Ezra W. Zuckerman Sivan ^b

^aHarvard Business School, USA

^bMIT Sloan School of Management, USA

Advances in Group Processes

ISBN: 978-1-83797-477-1, eISBN: 978-1-83797-476-4

Publication date: 14 December 2023

Abstract

Purpose

The purpose of this theoretical chapter is to rework a promising but limited theory of the foundations of reciprocity. Reciprocity is often attributed to an “internalized norm of reciprocity” – a deeply felt moral obligation to help those who have helped us in the past. Leifer's theory of local action develops a radically different and compelling foundation for reciprocity – one in which the impetus for reciprocity is a thinly veiled battle for status. We rework the theory to offer a new one that addresses its limitations. The key idea is that the impetus for reciprocity is the desire to signal that one intends to create joint value rather than to capture it from the counterparty.

Approach

Our analytical approach rests on close examination of a puzzling and underrecognized feature of social exchange: people who initiate social exchange routinely deny giving anything of value (“it was nothing”) while the receiver inflates their indebtedness to the giver (“this is too much!”). We refer to this negotiation strategy as reverse bargaining and use it as a window into the logic of social exchange.

Contribution

We develop a more general theory of how people manage the threat of opportunism in social exchange that subsumes local action theory. The key insight is that people who initiate social exchange and seek reciprocity must balance two competing objectives: to ensure that the person receiving a benefit recognizes a debt she must repay; and to mitigate the receiver's suspicion that the giver's ulterior motive is to capture value from the receiver.

Keywords

Acknowledgements

Acknowledgments

The authors would like to thank David Gibson, Brayden King, Ray Reagans, Minjae Kim, Melissa Staha, Brittany Bond, participants at the MIT Economic Sociology Working Group and MIT Behavioral Research Lab, and anonymous reviewers for their valuable help and comments on earlier drafts of this paper.

Citation

Friis, S. and Zuckerman Sivan, E.W. (2023), "It's About Showing Good Faith, Not Avoiding Shows of Weakness: Reworking Leifer's “Local Action” to Build a Robust Theory of Reciprocity", Kalkhoff, W., Thye, S.R. and Lawler, E.J. (Ed.) Advances in Group Processes (Advances in Group Processes, Vol. 40), Emerald Publishing Limited, Leeds, pp. 71-89. https://doi.org/10.1108/S0882-614520230000040004

Publisher

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Emerald Publishing Limited