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Love me, love my dog: an experimental study on social connections and indirect reciprocity

Author

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  • Liang, Pinghan
  • Meng, Juanjuan

Abstract

This paper conducts a laboratory experiment to investigate the role of social connections in behavioral indirect reciprocity. We provide the evidence of spillovers effects of social ties, e.g., the recipient’s indirect reciprocal act varies with the relations between the donor and a third party. Naturally occurring friendship is employed to study social connections. Thus, a beneficiary might either be a “friend” or a “stranger” of the donor. We demonstrate that knowing social connections significantly increases the recipient’s repayment only if the donor is kind enough in the first place. Overall, recipients’ indirect reciprocity almost doubles when introducing social networks among donors and beneficiaries. It is also shown that this spillovers effect is unlikely the result of recipients’ perception of donors’ expectations. Major theories of social preferences, e.g., fairness, intention-based, guilt-aversion, cannot offer satisfactory explanations of our findings. We propose an explanation based on in-group and out-group differences but with endogenous group status, in which social connections play a crucial role.

Suggested Citation

  • Liang, Pinghan & Meng, Juanjuan, 2013. "Love me, love my dog: an experimental study on social connections and indirect reciprocity," MPRA Paper 45270, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:45270
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    File URL: https://mpra.ub.uni-muenchen.de/45270/1/MPRA_paper_45270.pdf
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    References listed on IDEAS

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    Cited by:

    1. van Winden, Frans, 2015. "Political economy with affect: On the role of emotions and relationships in political economics," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 298-311.

    More about this item

    Keywords

    indirect reciprocity; social connections; spillovers; social preferences;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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