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Privacy, Trust and Social Network Formation

50 Pages Posted: 2 Dec 2015  

Alexia Gaudeul

Georg-August-Universität Göttingen

Caterina Giannetti

University of Jena; University of Bologna - Department of Economics

Date Written: December 1, 2015

Abstract

We study in the laboratory the impact of private information revelation on the selection of partners when forming individual networks. Our experiment combines a “network game” and a “public-good game”. In the network game, individuals decide with whom to form a link with, while in the public-good game they decide whether or not to contribute. The variations in our treatments allow us to identify the effect of revealing one’s name on the probability of link formation. Our main result suggests that privacy mechanisms affect partner selection and the consequent structure of the network: when individuals reveal their real name, their individual networks are smaller but their profits are higher. This indicates that the privacy costs of revealing personal information are compensated by more productive links.

Keywords: privacy, social networks, public goods, trust

JEL Classification: D12, D85

Suggested Citation

Gaudeul, Alexia and Giannetti, Caterina, Privacy, Trust and Social Network Formation (December 1, 2015). Available at SSRN: https://ssrn.com/abstract=2697523 or http://dx.doi.org/10.2139/ssrn.2697523

Alexia Gaudeul (Contact Author)

Georg-August-Universität Göttingen ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49 (0) 551 39 7333 (Phone)

HOME PAGE: http://agaudeul.free.fr

Caterina Giannetti

University of Jena ( email )

Furstengraben 1
Jena, Thuringa 07743
Germany

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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