Eliminating income inequality in a way that makes everyone equally poor causes
first movers, originally poor as well as newly poor, to behave with equal trust toward both in-group and out-group members.
The self-regarding preferences model predicts that second movers will keep all of the tripled amounts sent, and knowing this,
first movers will send nothing.
Generally, though, "The best time to enter (a new market) is usually right after the
first movers have failed and when you have the experience of others to learn from," Dobrev suggested.
This behavior is an indication either that
first movers want to give more money to attractive counterparts (taste-based discrimination) or that they expect attractive persons to reject lower offers (which is not taste based but rather based on expectations or, in a way, productivity).
Berg, Dickhaut, and McCabe found that 28 of 32
first movers sent more than the minimum positive amount of money, and 11 of the 28 paired second movers returned a greater amount than was received.
These
first movers will experience runaway success and be difficult to catch by slower rivals.
Approximately half of the
first movers trust and about two-thirds of the second movers are trustworthy.
They report that informing subjects in the social history treatment about the choices made by others in a previous investment game (the 'no history' treatment) causes
first movers to send more money (to second movers) and second movers to return more money (to
first movers).
X is commonly referred to as "trust," Y/X measures "trustworthiness" (trustworthiness is precluded when
first movers send zero), and the relationship between trust and trustworthiness, [partial derivative](Y/X)/[partial derivative]X, represents "reciprocity.
First movers (first-to-market) try to gain an early, albeit temporary, monopoly in the market by introducing a new product before the competition.
One timing advantage sometimes available to second movers that is denied to
first movers is the ability to piggy-back (or free-ride in economic terms) on the investment of
first movers.
The
First Movers Fellowship was developed by the Aspen Institute Business and Society Program, whose mission is to equip business leaders for the 21st century with a new management paradigm--the vision and knowledge to integrate corporate profitability and social value.
