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Homophily, Peer Effects, and Dishonesty

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  • Liza Charroin
  • Bernard Fortin
  • Marie Claire Villeval

Abstract

If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers; homophily, that is, the tendency of people to bond with similar others; or both? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect.

Suggested Citation

  • Liza Charroin & Bernard Fortin & Marie Claire Villeval, 2021. "Homophily, Peer Effects, and Dishonesty," CIRANO Working Papers 2021s-16, CIRANO.
  • Handle: RePEc:cir:cirwor:2021s-16
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    File URL: https://cirano.qc.ca/files/publications/2021s-16.pdf
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    1. Homophily, Peer Effects, and Dishonesty
      by maximorossi in NEP-LTV blog on 2021-05-21 20:05:50

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    Cited by:

    1. Marie Claire Villeval, 2019. "Comportements (non) éthiques et stratégies morales," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 1021-1046.
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    3. Eugen Dimant & Shaul Shalvi, 2022. "Meta-Nudging Honesty: Past, Present, and Future of the Research Frontier," CESifo Working Paper Series 9939, CESifo.

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    More about this item

    Keywords

    ; Peer Effects; Homophily; Dishonesty; Self-Selection Bias; Experiment;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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