A sensitive experimental method for ion spectroscopy and state specific reaction dynamics is described, briefly called laser induced reactions (LIR). The technique is based on (i) trapping ions over a long time in a cold 22-pole rf ion trap followed by mass spectrometric detection, (ii) providing a suitable low density gas environment for collisions, (iii) modifying the low temperature chemical kinetics using selective excitation via a tunable radiation source. In this paper, the H-atom transfer reaction C2H2+ (v(3)=1,J)+H-2-->C2H3++H, is used to monitor the infrared excitation of acetylene ions. Rotationally resolved spectra are presented for the antisymmetric C-H stretching vibration. For recording a spectrum, it is sufficient to fill the trap with a few thousand parent ions. Differences with respect to conventional IR spectroscopy are discussed, especially the processes which influence the LIR signal. From the measured intensities and their dependence on parameters such as storage time, laser fluence and target gas density, information on state specific rate coefficients has been obtained at an ambient temperature of 90 K. Based on a model simulating the kinetics, rate coefficients for various inelastic and reactive collisions are derived. Vibrational excitation of C2H2+ (v(3)=1,J) increases the rate of the title reaction by more than three orders of magnitude, while rotation hinders the reaction. The fine-structure state of the parent ion does not affect its reactivity. Ways are pointed out to apply the method to various classes of molecular ions.