Altruism with Social Roots: An Emerging Literature

DESARROLLO Y SO

SEGUNDO SEMESTRE DE 2006, PP. 245-260.

Note that p_i( j) is decreasing in degree-out ( f_i) and therefore p_i( j)
also simultaneously contains the effect of reciprocity and the effect of
social integration.

III. Discussion

This paper analyzes the determinants of giving within a social net-
work. After a detailed survey of this emerging literature we propose
two main explanatory variables for previous experimental results.

The first variable is strategic and is based on reciprocity, the possibil-
ity of ex-post favors (a second stage outside the lab added to the one-
shot dictator game and not controlled by the experimenter). The second
is the level of social integration measured by degree-out.

In our data set both these variables are highly and positively corre-
lated to giving, with the former being more significant in the regres-
sion analysis.

The reason why our measure of integration seems to be less relevant
than reciprocity is that its relation with giving might not be linear. To
illustrate this idea consider the most extreme cases in terms of
socialization: i) the most integrated subject, i.e. a subject who has
links with all the individuals in the network (degree - out = n - 1),
and ii) the subject with the lowest (positive) number of links in the
network (that is, degree - out = 1). Our point is that in these two
salient cases individuals will tend to be particularly generous: in the
first case due to the social integration variable and in the second due
to reciprocity. Let us elaborate on this idea.

First, consider a regular dictator game in N, with p_i(f) < 1 and 0 ≤ p_i(j) < 1
with the most integrated individual, degree - out = n - 1. It is easy to
check that the higher the level of integration the higher p_i( f) is, i.e.
p_i( f) increases with f_i. Then, in the extreme case of p_i( f ) = 1 subjects
know they will be playing with a friend on their list. This argument
provides an explanation for those results regarding the subject’s so-
cial integration: A highly integrated individual always matches with a
friend, so that he/she receives back part of his/her giving at least in
the form of outstanding cooperation.

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