Group Formation in a Public Good Experiment
AbstractEconomic behavior often takes place in groups of small numbers of peopleinteracting with each other (like work teams, neighborhoods, socialnetworks, etc.). Characteristic of such interaction is the development of(affective) interpersonal relationships, or social ties. According tosociologists, the embeddedness of economic behavior in networks of socialties has a profound impact on economic performance. Although, in economics,there is a growing awareness of the significance of social factors, thestudy of social dynamics is still in its infancy. In this paper weinvestigate experimentally the development of social ties structures, andthereby the formation of informal groups, through economic interaction in apublic good environment. It turns out that complicated dynamics arise fromindividual differences in social value orientation and (affective) responsepatterns. Our findings point at the importance of leadership in controllingand channeling emotions and sentiments to build effective groups, liketeams or communities. This leads to a different perspective on managementthan the one provided by standard agency theory. This discussion paper has led to a publication in the Journal of Economic Psychology (2006), 27, 187-204.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-093/1.
Date of creation: 08 Dec 1999
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Laboratory; Individual Behavior; Public Goods; Relation of Economics to Social Values;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
This paper has been announced in the following NEP Reports:
- NEP-ALL-2000-01-11 (All new papers)
- NEP-EXP-2000-01-11 (Experimental Economics)
- NEP-PUB-2000-01-11 (Public Finance)
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