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American Economic Journal: Microeconomics: Vol. 2 No. 1 (February 2010)

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The 1/d Law of Giving

Article Citation

Goeree, Jacob K., Margaret A. McConnell, Tiffany Mitchell, Tracey Tromp, and Leeat Yariv. 2010. "The 1/d Law of Giving." American Economic Journal: Microeconomics, 2(1): 183-203.

DOI: 10.1257/mic.2.1.183

Abstract

We combine survey data on friendship networks and individual characteristics with experimental observations from dictator games. Dictator offers are primarily explained by social distance, giving follows a simple inverse distance law. While student demographics play a minor role in explaining offer amounts, individual heterogeneity is important for network formation. In particular, we detect significant homophilous behavior; students connect to others similar to themselves. Moreover, the network data reveal a strong preference for cliques, students connect to those already close. The study is one of the first to identify network architecture with individual behavior in a strategic context. (JEL D44, H82)

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Authors

Goeree, Jacob K. (CA Institute of Technology)
McConnell, Margaret A. (CA Institute of Technology)
Mitchell, Tiffany (Westridge High School, Pasadena, CA)
Tromp, Tracey (Westridge High School, Pasadena, CA)
Yariv, Leeat (CA Institute of Technology)

JEL Classifications

D44: Auctions
H82: Governmental Property

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American Economic Journal: Microeconomics


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