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The 1/d Law of Giving

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

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)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/mic.2.1.183
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File URL: http://www.aeaweb.org/aej-micro/data/2008-0037_data.zip
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Article provided by American Economic Association in its journal American Economic Journal: Microeconomics.

Volume (Year): 2 (2010)
Issue (Month): 1 (February)
Pages: 183-203

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Handle: RePEc:aea:aejmic:v:2:y:2010:i:1:p:183-203
Note: DOI: 10.1257/mic.2.1.183
Contact details of provider: Web page: https://www.aeaweb.org/aej-micro
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  1. Mariagiovanna Baccara & Leeat Yariv, 2008. "Similarity and Polarization in Groups," Working Papers 08-27, New York University, Leonard N. Stern School of Business, Department of Economics.
  2. repec:oup:restud:v:77:y:2010:i:2:p:417-458 is not listed on IDEAS
  3. Charness, Gary B & Rabin, Matthew, 2001. "Understanding Social Preferences With Simple Tests," University of California at Santa Barbara, Economics Working Paper Series qt0dc3k4m5, Department of Economics, UC Santa Barbara.
  4. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
  5. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 507-548.
  6. Nicola Persico & Andrew Postlewaite & Dan Silverman, 2004. "The Effect of Adolescent Experience on Labor Market Outcomes: The Case of Height," NBER Working Papers 10522, National Bureau of Economic Research, Inc.
  7. David Marmaros & Bruce Sacerdote, 2006. "How Do Friendships Form?," The Quarterly Journal of Economics, Oxford University Press, vol. 121(1), pages 79-119.
  8. Arun Sundararajan, 2004. "Local Network Effects and Network Structure," Industrial Organization 0412011, EconWPA.
  9. Mobius, Markus & Do, Quoc-Anh & Leider, Stephen & Rosenblat, Tanya, 2009. "Directed Altruism and Enforced Reciprocity in Social Networks," Scholarly Articles 3054685, Harvard University Department of Economics.
  10. Gary E. Bolton & Rami Zwick & Elena Katok, 1998. "Dictator game giving: Rules of fairness versus acts of kindness," International Journal of Game Theory, Springer, vol. 27(2), pages 269-299.
  11. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
  12. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
  13. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
  14. Stephen Leider & Markus M. Möbius & Tanya Rosenblat & Quoc-Anh Do, 2009. "Directed Altruism and Enforced Reciprocity in Social Networks," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1815-1851.
  15. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  16. Bandiera, Oriana & Barankay, Iwan & Rasul, Imran, 2009. "Social Incentives in the Workplace," IZA Discussion Papers 4190, Institute for the Study of Labor (IZA).
  17. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
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