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What Do We Expect from Our Friends?

Stephen Leider (), Markus M. Möbius, Tanya Rosenblat and Quoc-Anh Do ()

Journal of the European Economic Association, 2010, vol. 8, issue 1, 120-138

Abstract: We conduct a field experiment in a large real-world social network to examine how subjects expect to be treated by their friends and by strangers who make allocation decisions in modified dictator games. Although recipients' beliefs accurately account for the extent to which friends will choose more generous allocations than strangers (i.e., directed altruism), recipients are not able to anticipate individual differences in the baseline altruism of allocators (measured by giving to an unnamed recipient, which is predictive of generosity toward named recipients). Recipients who are direct friends with the allocator, or even recipients with many common friends, are no more accurate in recognizing intrinsically altruistic allocators. Recipient beliefs are significantly less accurate than the predictions of an econometrician who knows the allocator's demographic characteristics and social distance, suggesting recipients do not have information on unobservable characteristics of the allocator. (JEL: C73, C91, D64) (c) 2010 by the European Economic Association.

JEL-codes: C73 C91 D64 (search for similar items in EconPapers)
Date: 2010
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