Paying it forward: an experimental study on social connections and indirect reciprocity

Pinghan Liang and Juanjuan Meng ()
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Juanjuan Meng: Peking University

Review of Economic Design, 2023, vol. 27, issue 2, No 6, 387-417

Abstract: Abstract This paper studies how in-group social connections affect outsiders’ pro-social behavior towards group members. We employ an indirect investment game, in which a recipient of a good deed has to return to a beneficiary, instead of the original donor. We introduce the naturally-occurring social connections between the donor and the beneficiary, and show that such connections increase the recipients’ transfer to a beneficiary by 42% when the donor’s transfer is above average. The spillover does not function through the signaling of the donor’s expectations, and altruism with an endogenous reference group explains our results well.

Keywords: Indirect reciprocity; Social connections; Social preferences (search for similar items in EconPapers)
JEL-codes: C91 D03 D85 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10058-022-00298-3

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