Do Social Networks Inspire Employment? - An Experimental Analysis -

Siegfried K. Berninghaus (sbe@vwl3.wiwi.uni-karlsruhe.de), Sven Fischer (fischer@econ.mpg.de) and Werner Gueth (gueth@mpiew-jena.mpg.de)
Additional contact information
Siegfried K. Berninghaus: Universität Karlsruhe, Postal: RZ Zirkel 2 D-76128 Karlsruhe
Sven Fischer: Max Planck Institute for Research into Economic Systems. Strategic Interaction Group, Postal: Kahlaische Strasse 10, D-07745 Jena
Werner Gueth: Max Planck Institute for Research into Economic Systems, Strategic Interaction Group, Postal: Kahlaische Straße 10, D-07745 Jena
Authors registered in the RePEc Author Service: Werner Güth (gueth@coll.mpg.de)

No 06-11, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: There is robust field data showing that a frequent and successful way of looking for a job is via the intermediation of friends and relatives. Here we want to test this experimentally. Participants first play a simple public goods game with two interaction partners ('friends'), and share whatever they earn this way with two different sharing partners ('cousins') who have different friends. Thus one's social network contains two 'friends' and two 'cousins'. In the second phase of the experiment participants learn about a job opportunity for themselves and one additional vacancy and decide whom of their network they want to recommend and, if so, in which order. In case of coemployment, both employees compete for a bonus. Will one recommend others for the additional job in spite of this competition, will one prefer 'friends' or 'cousins' and how does this depend on contributions (of 'friends') or shared profits (with 'cousins')? Our findings are partly quite puzzling. Most participants, for instance, recommend quite actively but compete very fiercely for the bonus.

Pages: 22 pages
Date: 2006-10-02
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm, nep-soc and nep-ure
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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Working Paper: Do social networks inspire employment?: An experimental analysis (2006)
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