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The 1/d Law of Giving

Author

Listed:
  • Jacob K. Goeree
  • Margaret A. McConnell
  • Tiffany Mitchell
  • Tracey Tromp
  • Leeat Yariv

Abstract

We combine survey data on friendship networks and individual characteristics with experimental observations from dictator games. Dictator offers are primarily explained by social distance, giving follows a simple inverse distance law. While student demographics play a minor role in explaining offer amounts, individual heterogeneity is important for network formation. In particular, we detect significant homophilous behavior; students connect to others similar to themselves. Moreover, the network data reveal a strong preference for cliques, students connect to those already close. The study is one of the first to identify network architecture with individual behavior in a strategic context. (JEL D44, H82)

Suggested Citation

  • Jacob K. Goeree & Margaret A. McConnell & Tiffany Mitchell & Tracey Tromp & Leeat Yariv, 2010. "The 1/d Law of Giving," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 183-203, February.
    • Handle: RePEc:aea:aejmic:v:2:y:2010:i:1:p:183-203
    Note: DOI: 10.1257/mic.2.1.183
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property

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