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Directed Altruism and Enforced Reciprocity in Social Networks

  • Rosenblat, Tanya
  • Mobius, Markus

We conduct online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52 percent relative to random strangers, while future interaction effects increase giving by an additional 24 percent when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency enhancing favors. We also find that subjects with higher baseline altruism have friends with higher baseline altruism.

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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 13025.

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Date of creation: 01 Feb 2009
Date of revision:
Publication status: Published in Quarterly Journal of Economics, November 2009, vol. 124 no. 4, pp. 1815-1851
Handle: RePEc:isu:genres:13025
Contact details of provider: Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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  1. Townsend, R.M., 1991. "Risk and Insurance in Village India," University of Chicago - Economics Research Center 91-3, Chicago - Economics Research Center.
  2. Bruce Sacerdote & David Marmaros, 2005. "How Do Friendships Form?," NBER Working Papers 11530, National Bureau of Economic Research, Inc.
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    • Brañas Garza, Pablo & Espinosa Alejos, María Paz & Cobo Reyes, Ramón & Jiménez, Natalia & Ponti, Giovanni, 2006. "Altruism in the (Social) Network," DFAEII Working Papers 2006-04, University of the Basque Country - Department of Foundations of Economic Analysis II.
    • Kovarik, Jaromir & Jiménez, Natalia & Ponti, Giovanni & Espinosa Alejos, María Paz & Brañas Garza, Pablo & Cobo Reyes, Ramón, 2009. "Altruism and Social Integration," DFAEII Working Papers 2009-05, University of the Basque Country - Department of Foundations of Economic Analysis II.
    • Kovarik, Jaromir & Jiménez, Natalia & Ponti, Giovanni & Espinosa Alejos, María Paz & Brañas Garza, Pablo & Cobo Reyes, Ramón, 2009. "Altruism and Social Integration," IKERLANAK 2009-35, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  4. 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.
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  8. Fehr, Ernst & Schmidt, Klaus M., . "A theory of fairness, competition, and cooperation," Chapters in Economics, University of Munich, Department of Economics.
  9. Stephen Leider & Markus M. Mobius & Tanya Rosenblat & Quoc-Anh Do, 2009. "What Do We Expect from Our Friends?," Microeconomics Working Papers 23053, East Asian Bureau of Economic Research.
  10. Stephen Leider & Markus M. Möbius & Tanya Rosenblat & Quoc-Anh Do, 2009. "Directed Altruism and Enforced Reciprocity in Social Networks," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1815-1851, November.
  11. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination In A Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 351-377, February.
  12. Andreoni, James & Vesterlund, Lise, 2001. "Which is the Fair Sex? Gender Differences in Altruism," Staff General Research Papers 1951, Iowa State University, Department of Economics.
  13. Udry, Christopher, 1994. "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 495-526, July.
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