infonet-economy

Field evidence suggests that agents belonging to the same group tend to behave similarly,ni.e., behavior exhibits social interaction effects. Testing for such effects raises severenidentification problems. We conduct an experiment that avoids these problems. The mainndesign feature is that each subject simultaneously is a member of two randomly assigned andneconomically identical groups where only members ("neighbors") are different. In both groupsnsubjects make contribution decisions to a public good. We speak of social interactions if thensame subject at the same time makes group-specific contributions that depend on theirnrespective neighbors' contribution. Our results are unambiguous evidence for socialninteractions. A majority of subjects is very strongly influenced by the contributions of theirnrespective neighbors. Roughly ten percent exhibit no social interactions.