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LIVING IN TWO NEIGHBORHOODS—SOCIAL INTERACTION EFFECTS IN THE LABORATORY
Author(s) -
FALK ARMIN,
FISCHBACHER URS,
GÄCHTER SIMON
Publication year - 2013
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2010.00332.x
Subject(s) - public goods game , public good , microeconomics , social relation , field (mathematics) , economics , identification (biology) , subject (documents) , collective behavior , social preferences , group (periodic table) , mathematical economics , experimental economics , game theory , social psychology , psychology , computer science , ecology , biology , sociology , mathematics , physics , quantum mechanics , library science , anthropology , pure mathematics
Field evidence suggests that people belonging to the same group often behave similarly, that is, behavior exhibits social interaction effects. We conduct a laboratory experiment that avoids the identification problem present in the field and allows us to study the behavioral logic of social interaction effects. Our novel design feature is that each subject is simultaneously a member of two randomly assigned and identical groups where only members (“neighbors”) are different. We study behavior in a coordination game with multiple equilibria and a public goods game, which has only one equilibrium in material payoffs. We speak of social interactions if the same subject at the same time makes group‐specific decisions that depend on their respective neighbors' decisions. We find that a majority of subjects exhibit social interaction effects both when the game has multiple equilibria in material payoffs and when it only has one equilibrium. ( JEL C91, H41, K42, H26)