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Living in Two Neighborhoods: Social Interactions in the Lab

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  • Falk, Armin

    (University of Bonn)

  • Fischbacher, Urs

    (University of Konstanz)

  • Gächter, Simon

    (University of Nottingham)

Abstract

Field evidence suggests that people belonging to the same group often behave similarly, i.e., behaviour exhibits social interaction effects. We conduct an experiment that avoids the identification problem present in the field. Our novel design feature is that each subject simultaneously is a member of two randomly assigned and identical groups where only members (‘neighbours’) are different. In both groups subjects contribute to a public good. We speak of social interactions if the same subject at the same time makes group-specific contributions that depend on their respective neighbours’ contribution. We find that a majority of subjects exhibits social interaction effects.

Suggested Citation

  • Falk, Armin & Fischbacher, Urs & Gächter, Simon, 2004. "Living in Two Neighborhoods: Social Interactions in the Lab," IZA Discussion Papers 1381, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp1381
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    More about this item

    Keywords

    identification; social interactions; experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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