Directed Altruism and Enforced Reciprocity in Social Networks

• Main Authors: Leider, Stephen, Mobius, Markus M., Rosenblat, Tanya S., DO, Quoc-Anh
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2008
• Subjects: modified dictator games; directed altruism; enforced reciprocity; social networks; Behavioral Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/1147; https://ink.library.smu.edu.sg/context/soe_research/article/2146/viewcontent/DirectedAltruism.pdf
• Institution: Singapore Management University

We conducted 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% relative to random strangers, whereas future interaction effects increase giving by an additional 24% 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.