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Title:Living in two neighborhoods: Social interaction effects in the lab PDF Logo
Authors:Falk, Armin
Fischbacher, Urs
Gächter, Simon
Issue Date:2009
Series/Report no.:CeDEx discussion paper series 2009-01
Abstract:Field evidence suggests that people belonging to the same group often behave similarly, i.e., 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 exhibits social interaction effects both when the game has multiple equilibria in material payoffs and when it only has one equilibrium.
Subjects:social interactions
identification
experiments
coordination
cooperation
JEL:C91
H41
K42
H26
Document Type:Working Paper
Appears in Collections:CeDEx Discussion Paper Series, The University of Nottingham

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