Abstract
Norms of positive and negative reciprocity constitute important constraints that affect human behavior. While much attention has been devoted to the economics of reciprocity in cooperation, the stylized fact that humans have a natural predisposition towards negative reciprocity and retaliation has received little consideration in the literature. In this study we investigate the behavioral foundations of retaliatory justice by considering the conditions under which norms of retaliation may constitute instruments for promoting desirable cooperation. The results suggest that human instincts for revenge may an important ingredient for the sustainability of peaceful social behavior.
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