Group Formation in a Public Good Experiment

Joep Sonnemans (), Frans van Dijk and Frans van Winden ()
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Frans van Dijk: Ministry of Justice, The Hague

No 99-093/1, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Economic behavior often takes place in groups of small numbers of peopleinteracting with each other (like work teams, neighborhoods, socialnetworks, etc.). Characteristic of such interaction is the development of(affective) interpersonal relationships, or social ties. According tosociologists, the embeddedness of economic behavior in networks of socialties has a profound impact on economic performance. Although, in economics,there is a growing awareness of the significance of social factors, thestudy of social dynamics is still in its infancy. In this paper weinvestigate experimentally the development of social ties structures, andthereby the formation of informal groups, through economic interaction in apublic good environment. It turns out that complicated dynamics arise fromindividual differences in social value orientation and (affective) responsepatterns. Our findings point at the importance of leadership in controllingand channeling emotions and sentiments to build effective groups, liketeams or communities. This leads to a different perspective on managementthan the one provided by standard agency theory.

This discussion paper has led to a publication in the Journal of Economic Psychology (2006), 27, 187-204.

Keywords: Laboratory; Individual Behavior; Public Goods; Relation of Economics to Social Values (search for similar items in EconPapers)
JEL-codes: A13 C91 H41 (search for similar items in EconPapers)
Date: 1999-12-08
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