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Living in Two Neighborhoods - Social Interactions in the Lab

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  • Armin Falk
  • Urs Fischbacher
  • Simon G�chter

Abstract

Field evidence suggests that agents belonging to the same group tend to behave similarly, i.e., behavior exhibits social interaction effects. Testing for such effects raises severe identification problems. We conduct an experiment that avoids these problems. The main design feature is that each subject simultaneously is a member of two randomly assigned and economically identical groups where only members (�neighbors�) are different. In both groups subjects make contribution decisions 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 neighbors� contribution. Our results are unambiguous evidence for social interactions. A majority of subjects is very strongly influenced by the contributions of their respective neighbors. Roughly ten percent exhibit no social interactions.

Suggested Citation

  • Armin Falk & Urs Fischbacher & Simon G�chter, "undated". "Living in Two Neighborhoods - Social Interactions in the Lab," IEW - Working Papers 150, Institute for Empirical Research in Economics - University of Zurich.
    • Handle: RePEc:zur:iewwpx:150
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    More about this item

    Keywords

    Social interactions; identification; experiments;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • 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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