Klaus M. Schmidt Why Do Decision Makers Reciprocate to Gifts?

Klaus M. Schmidt is Full Professor of Economics at the Ludwig-Maximilians-Universität Munich. He was also Visiting Professor at Harvard University, University of California at Berkeley, Yale University and Stanford University. His research interests include contract theory, game theory, and behavioral economics. Among his advisory duties is that of Corresponding Member of the Council of the Lindau Nobel Laureate Meetings and that of member of the Advisory Board of the German Federal Minister for Economics and Technology. He has also been editor for a number of journals and is currently Senior Editor of Economic Policy. Since 2005, he is Member of the Berlin-Brandenburg Academy of Sciences.

Area of Research

Contract Theory, Game Theory, Behavioral Economics, Experimental Economics, Industrial Organization, Competition Policy /Wettbewerbspolitik, Privatization, Auctions and Procurement, Venture Capital, Political Economy

since 1995

Full Professor

Ludwig Maximilian University Munich (Ludwig-Maximilians-Universität München)

Department of Economics


Visiting Professor

Harvard University


Visiting Professor

Harvard University


Visiting Professor

University of California, Berkeley


Visiting Professor

Yale University


Dean of the Faculty of Economics

Ludwig Maximilian University Munich (Ludwig-Maximilians-Universität München)


Visiting Professor

Stanford University


Assistant Professor

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)


Visiting Assistant Professor

Massachusetts Institute of Technology (MIT)


Teaching Assistant

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)


Habilitation in Economics

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)


PhD in Quantitative Economics

University of Bonn (Rheinische Friedrich-Wilhelms-Universität Bonn)


Diploma in Economics and Political Studies

University of Hamburg (Universität Hamburg)

- Fellow of the Econometric Society

- Fellow of the European Economic Association

- Berlin-Brandenburg Academy of Sciences and Humanities


- Cross of Merit, First Class, of the Federal Republic of Germany (2017)

- Gossen Prize of the German Economic Association (2001)

- Prize of the Berlin-Brandenburg Academy of Sciences and Humanities (2001)

- “Teaching Prize” of the Bavarian Ministry of Science (2000)

Mostly, reciprocity is seen as a positive act. It helps people to cooperate and to engage in mutually beneficial exchange. KLAUS M. SCHMIDT, however, is interested in the negative aspects of reciprocity, for instance when a decision maker is offered a gift by an interested party. His research is focused on two aspects: Why do people reciprocate? And are the remedies discussed, such as disclosure and size limits, really effective measures? As he relates in this video, his research group set up a controlled lab experiment to tackle these questions. In different treatments, varying gift sizes and disclosure, they found that most people reciprocate when given a gift (or not given a gift) but that increasing gift size or disclosure of the gift giving has little effects on the reciprocity of the decision maker. From these results, the researchers were able to propose a new theory to explain reciprocal behavior.

LT Video Publication DOI: https://doi.org/10.21036/LTPUB10597

You Owe Me

  • Ulrike Malmendier and Klaus Schmidt
  • American Economic Review
  • Published in 2017
Ulrike Malmendier and Klaus Schmidt. "You Owe Me." American Economic Review 107, 2 (2017): 493-526.