The dark side of friendship: envy

Ramon Cobo-Reyes and Natalia Jiménez ()

No 07/07, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: This paper studies the e¤ect of social relations on the convergence to the e¢ cient equilibrium in a 2x2 coordination game. We employ a 2x2 factorial design in which we explore two di¤erent games with asymmetric payo¤s and two matching protocols: .friends.versus .strangers.. In the .rst game payo¤s of the worse o¤ player are the same in the two equilibria, whereas in the second game, this player must sacri.ce her own payo¤ for achieving the e¢ cient equilibrium. Results show that .strangers. coor- dinate more frequently in the e¢ cient equilibrium than .friends.in both games. Regarding network measures, (such us degree in, degree out and betweenness) they are all positively correlated with the strategy which leads to the e¢ cient outcome except clustering. In addition, envy is a salient factor in explaining e¢ cient convergence.

Keywords: coordination; efficiency; envy; experiments; friendship; social networks. (search for similar items in EconPapers)
JEL-codes: A14 C72 C92 D63 (search for similar items in EconPapers)
Date: 2007-12-31
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