Becoming Friends or Foes? How Exposure to Competitive Environments and Social Proximity Shape Social Preferences

41 Pages Posted: 13 Feb 2019 Last revised: 14 Jan 2021

See all articles by Andy Cao

Andy Cao

Texas A&M University, USA

Eugen Dimant

University of Pennsylvania; CESifo

Kyle B. Hyndman

University of Texas at Dallas

Nanyin Yang

Texas A&M University, USA

Date Written: January 14, 2021

Abstract

We study the interaction between competition and social proximity on altruism, trust, and reciprocity, with an emphasis on gender differences. We decompose the behavioral channels by utilizing variants of both the Trust Game and the Dictator Game in a design that systematically controls the transmission of relevant information regarding the outcome of a previous competition and the social proximity between the competitors. On an aggregate level, our results suggest that knowledge of a victory over a socially proximate opponents leads to a large and significant increase in participants' investment in the Trust Game, but not in the Dictator Game.
However, we also found substantial gender heterogeneity across treatments: men tend to show higher levels of altruism upon learning that their competitor shares similar characteristics with them. Moreover, this information yields a significant increase in men's trust when they are also told that they won the competition. In contrast, women's decisions about trust and altruism are not responsive to any of our treatment conditions. Our results provide helpful insights into the structure of incentives within institutions and companies, which are known to affect performance.

Keywords: Altruism, Competition, Gender, Social Proximity, Trust

JEL Classification: C9, D01, D6, D9

Suggested Citation

Cao, Andy and Dimant, Eugen and Hyndman, Kyle B. and Yang, Nanyin, Becoming Friends or Foes? How Exposure to Competitive Environments and Social Proximity Shape Social Preferences (January 14, 2021). Available at SSRN: https://ssrn.com/abstract=3326107 or http://dx.doi.org/10.2139/ssrn.3326107

Andy Cao

Texas A&M University, USA ( email )

Eugen Dimant (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://sites.google.com/view/eugendimant/

CESifo ( email )

Poschinger Str. 5
Munich
Germany

Kyle B. Hyndman

University of Texas at Dallas ( email )

2601 North Floyd Road
P.O. Box 830688
Richardson, TX 75083
United States

Nanyin Yang

Texas A&M University, USA ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
83
Abstract Views
652
rank
340,181
PlumX Metrics