Trusting behavior in a repeated investment game

We compare a seven period repeated investment game to the one-shot investment game. On an average, in the repeated game, player A (the trustor) sends more and player B (the trustee) returns a larger percentage than in the one-shot game. Both the amount sent and the percentage returned increase up to period 5 and drop sharply thereafter. The reciprocity hypothesis for B players' behavior is compatible with the first five periods, but in the two end periods, most B players behaved strategically by not returning. The reciprocity hypothesis for A players' behavior is compatible for all periods of the game. (C) 2004 Published by Elsevier B.V.