January 2012

IZA DP No. 6277: Peer Effects and Social Preferences in Voluntary Cooperation

revised version published as 'Peer effects and social preferences in voluntary cooperation: A theoretical and experimental analysis' in: Journal of Economic Psychology, 2015, 48, 72 - 88

Substantial evidence suggests the behavioral relevance of social preferences and also the importance of social influence effects ("peer effects"). Yet, little is known about how peer effects and social preferences are related. In a three-person gift-exchange experiment we find causal evidence for peer effects in voluntary cooperation: agents' efforts are positively related despite the absence of material payoff interdependencies. We confront this result with major theories of social preferences which predict that efforts are unrelated, or negatively related. Some theories allow for positively-related efforts but cannot explain most observations. Conformism, norm following and considerations of social esteem are candidate explanations.