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What Do We Expect from Our Friends?

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  • Leider, Stephen
  • Mobius, Markus
  • Rosenblat, Tanya
  • Do, Quoc-Ahn

Abstract

We conduct a field experiment in a large real-world social network to examine how subjects expect to be treated by their friends and by strangers who make allocation decisions in modified dictator games. While recipients’ beliefs accurately account for the extent to which friends will choose more generous allocations than strangers (i.e. directed altruism), recipients are not able to anticipate individual differences in the baseline altruism of allocators (measured by giving to an unnamed recipient, which is predictive of generosity towards named recipients). Recipients who are direct friends with the allocator, or even recipients with many common friends, are no more accurate in recognizing intrinsically altruistic allocators. Recipient beliefs are significantly less accurate than the predictions of an econometrician who knows the allocator’s demographic characteristics and social distance, suggesting recipients do not have information on unobservable characteristics of the allocator.
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Suggested Citation

  • Leider, Stephen & Mobius, Markus & Rosenblat, Tanya & Do, Quoc-Ahn, 2010. "What Do We Expect from Our Friends?," Staff General Research Papers Archive 32103, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:32103
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    References listed on IDEAS

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    5. Dean Karlan & Markus Mobius & Tanya Rosenblat & Adam Szeidl, 2009. "Trust and Social Collateral," The Quarterly Journal of Economics, Oxford University Press, pages 1307-1361.
    6. Huck, Steffen & Weizsacker, Georg, 2002. "Do players correctly estimate what others do? : Evidence of conservatism in beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 47(1), pages 71-85, January.
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    Citations

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    Cited by:

    1. Fischer Sven & Hamann Hanjo & Goerg Sebastian J., 2015. "Cui Bono, Benefit Corporation? An Experiment Inspired by Social Enterprise Legislation in Germany and the US," Review of Law & Economics, De Gruyter, pages 79-110.
    2. Baul, Tushi, 2013. "Self-selection and peer-effects in experimental labor markets," ISU General Staff Papers 201301010800004327, Iowa State University, Department of Economics.
    3. 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, pages 1815-1851.
    4. David Backus & Mikhail Chernov & Ian Martin, 2011. "Disasters Implied by Equity Index Options," Journal of Finance, American Finance Association, vol. 66(6), pages 1969-2012, December.
    5. Alexander Morell, 2014. "The Short Arm of Guilt: Guilt Aversion Plays Out More Across a Short Social Distance," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2014_19, Max Planck Institute for Research on Collective Goods, revised Dec 2016.
    6. Binzel, Christine & Fehr, Dietmar, 2013. "Giving and sorting among friends: Evidence from a lab-in-the-field experiment," Economics Letters, Elsevier, vol. 121(2), pages 214-217.
    7. repec:spr:grdene:v:22:y:2013:i:5:d:10.1007_s10726-012-9295-5 is not listed on IDEAS
    8. Christoph Engel, 2011. "Dictator games: a meta study," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 583-610, November.
    9. Mariagiovanna Baccara & Ayse Imrohoroglu & Alistair J. Wilson & Leeat Yariv, 2012. "A Field Study on Matching with Network Externalities," American Economic Review, American Economic Association, pages 1773-1804.
    10. Lisa Bruttel & Werner Güth, 2013. "Tit for Others' Tat Repeated Prisoner's Dilemma Experiments with Third-Party Monitoring and Indirect Punishment," Working Paper Series of the Department of Economics, University of Konstanz 2013-22, Department of Economics, University of Konstanz.
    11. Christine Binzel & Dietmar Fehr, 2010. "Social Relationships and Trust," Working Papers 542, Economic Research Forum, revised 09 Jan 2010.
    12. Monic Sun & Xiaoquan (Michael) Zhang & Feng Zhu, 2012. "To Belong or to Be Different? Evidence from a Large-Scale Field Experiment in China," Working Papers 12-15, NET Institute, revised Oct 2012.
    13. repec:pit:wpaper:486 is not listed on IDEAS
    14. Thorsten Chmura & Christoph Engel & Markus Englerth & Thomas Pitz, 2010. "At the Mercy of the Prisoner Next Door. Using an Experimental Measure of Selfishness as a Criminological Tool," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2010_27, Max Planck Institute for Research on Collective Goods.
    15. Lorenz Goette & David Huffman & Stephan Meier, 2012. "The Impact of Social Ties on Group Interactions: Evidence from Minimal Groups and Randomly Assigned Real Groups," American Economic Journal: Microeconomics, American Economic Association, pages 101-115.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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