Trust, Reciprocity and the Strength of Social Ties: An Online Social Network based Field Experiment

We study how the strength of social ties is related to economic choices made by pairs of individuals who share a social relationship. We draw our information about social ties from the Facebook social network which comprises billions of connections of varying strength between acquainted individuals. We employ an economic experiment using monetary incentives to examine whether trust and reciprocity in economic settings might vary as a function of the strength of these ties. Specifically, we conduct the “investment game” [henceforth IG, see Berg, Dickhaut and McCabe (1995)] between pairs of Facebook friends, using the rich prior interaction data contained in this online social networking platform as a source of variation in the strength of ties between players. We achieve our data collection using a specialized Facebook software application we have designed, developed and implemented