Cooperation and Expectations in Networks. Evidence from a Network Public Good Experiment in Rural India
We play a one-shot public good game in rural India between farmers connected by an exogenous star network. Contributions by the centre of the star reach more players and have a larger impact on aggregate payoffs than contributions by the spoke players. Yet, we find that the centre player contributes just as much as the average of the spokes. We elicit expectations about the decisions of the centre player and, in randomly selected sessions, we disclose the average expectation of the farmers in the network. Farmers match the disclosed values frequently and do so more often when the monetary cost of making a contribution is reduced. However, disclosure is not associated with higher contributions. Our results support the predictions of a model of other-regarding preferences where players care about the expectations of others. This model is helpful to understand barriers to improvement in pro-social behaviour when groups expect low pro-sociality.
Caria, A.S.; Fafchamps, M. Cooperation and Expectations in Networks. Evidence from a Network Public Good Experiment in Rural India. CSAE Economics Department, University of Oxford, Oxford, UK (2014) 60 pp. [CSAE Working Paper WPS/2014-33]