Reciprocal Exchange: A Self-Sustaining System
Publication
, Journal Article
Kranton, RE
Published in: American Economic Review
September 1, 1996
Reciprocal exchange, or gift exchange, remains a widespread means of obtaining goods and services. This paper examines the persistence of reciprocal exchange by formalizing the interaction between self-enforcing exchange agreements and monetary market exchange. When more people engage in reciprocal exchange, market search costs increase, reciprocity is easier to enforce and yields higher utility. Thus, personalized exchange can persist even when it is inefficient. Conversely, large markets can destroy reciprocity when reciprocal exchange is efficient. The results characterize the use of personal "connections" as a system of reciprocal exchange and explain the disappearance of reciprocity when tribes encounter markets.
Duke Scholars
Published In
American Economic Review
ISSN
0002-8282
Publication Date
September 1, 1996
Volume
86
Issue
4
Start / End Page
830 / 851
Related Subject Headings
- Economics
- 15 Commerce, Management, Tourism and Services
- 14 Economics
Citation
APA
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ICMJE
MLA
NLM
Kranton, R. E. (1996). Reciprocal Exchange: A Self-Sustaining System. American Economic Review, 86(4), 830–851.
Kranton, R. E. “Reciprocal Exchange: A Self-Sustaining System.” American Economic Review 86, no. 4 (September 1, 1996): 830–51.
Kranton RE. Reciprocal Exchange: A Self-Sustaining System. American Economic Review. 1996 Sep 1;86(4):830–51.
Kranton, R. E. “Reciprocal Exchange: A Self-Sustaining System.” American Economic Review, vol. 86, no. 4, Sept. 1996, pp. 830–51.
Kranton RE. Reciprocal Exchange: A Self-Sustaining System. American Economic Review. 1996 Sep 1;86(4):830–851.
Published In
American Economic Review
ISSN
0002-8282
Publication Date
September 1, 1996
Volume
86
Issue
4
Start / End Page
830 / 851
Related Subject Headings
- Economics
- 15 Commerce, Management, Tourism and Services
- 14 Economics