Data for Table 1. Row 1 is based on the 1986 International Social Survey Programme module on Social Support and Networks of the GSS. Question 1018 asks “Suppose you need to borrow a large sum of money. A. Who would you turn to …rst? B. Who would you turn to second?” Possible answers are husband/wife/partner, mother, father, daughter, son, sister, brother, other
relative including in-laws, closest friend, other friend, neighbor and someone you work with, which we classify as persons in the immediate social network of the respondent, as well as bank/credit union …nancial institution, Savings&loan, employer, government or social services, other, no one, don’t know and no answer.
Row 2 uses the Micro and Small Enterprises Survey conducted by Ageba and Amha in Ethiopia in 2003. Enterprises were asked if they ever received credit from various sources; the proportion of …rms who received credit from friends/relatives is reported. See Table 1 in Ageba and Amha (2006) for details.
Row 3 makes use of survey data collected by the Regional Program for Enterprise Development (RPED) of the World Bank for 224 manufacturing …rms in Kenya in 1993. Firms were asked how they started their business; the proportion of …rms who used loans from friends and relatives is reported. See Table 21 in Fafchamps, Biggs, Conning, and Srivastava (1994) for details.
Rows 4 and 5 use data from the 1996 topical module of the GSS on Markets. For example, purchasers of cars from individuals were asked “Which of the following best describes your relation- ship to the person who sold you the vehicle at the time of the purchase?” and purchasers of cars from dealers were asked about “your relationship to the salesperson from whom you purchased your car or to the owner of the auto dealership.” Respondents were asked to choose from the following responses: a relative (including in-laws), a friend or acquaintance, a friend of a friend or relative or a relative of a friend, not a friend, but someone with whom I had previous business dealings, or no prior relationship. We classify all but the last of these responses as persons belonging to the respondent’s immediate social network. Similar questions were asked for home purchases. See Table 1 in DiMaggio and Louch (1998) for details.
Row 6 uses data from the 1991 and 1992 Current Population Surveys. The CPS asks active jobseekers about their method of job search. Potential answers are: checked with public employment agency, checked with private employment agency, checked with employer directly, checked with friends or relatives, placed or answered ads, and used other search methods. We classify friends or relatives as belonging to the immediate social network of the jobseeker. See also Table 1 in Bortnick and Ports (1992) and also Ports (1993).
Row 7 is based on data from the 1993 Panel Study of Income Dynamics. The job search categories in the PSID are the same as in the CPS. See appendix table 1 in Ioannides and Loury (2004) for details.
Experimental Data for Section 4. In December 2003 Harvard undergraduate subjects were recruited through posters, ‡yers and mail invitation and directed to a website. Subjects provided their email address and were sent a password. Subjects without a valid email address were excluded. All future earnings from the experiment were transferred to the electronic cash-card account of the student.
Subjects who logged onto the website had to (1) report information about their social network and (2) …ll in a questionnaire asking basic demographic information. Subjects were given incentive to report their friends truthfully: they received 50 cents with 50 percent probability if they named each other. The expected payo¤ of 25 cents was set to be su¢ ciently large to give subjects an incentive to report their friends truthfully but not large enough to induce ‘gaming’. The random- ization was included to help avoid disappointment if a subject is not named by enough friends. The technique of providing monetary incentives to truthfully reveal friendships worked well. The pilot focused on two houses with 806 students in total, of whom 569 signed up. The survey netted 5690 one-way links. Of those, 2086 links were symmetric links where both agents named each other. For symmetric links, the two parties’assessment of the time they spend together in a typical week was within half and hour in 80% of all cases. The social network was constructed as an OR-network
where two subjects share a link if either of them named the other.
The total earnings of subjects in the pilot consisted of (1) a baseline compensation for completing the full online survey and (2) the earnings from the dictator games. Subjects also entered a ra- e where they could win valuable prizes nine months later provided they completed the initial surveys plus all follow-up treatments.
Treatments. In May 2004 various treatments were run to measure social preferences of the students. Within each house an equal number of allocators (player 1) and recipients (player 2) were randomly selected. Allocators faced …ve di¤erent recipients in a modi…ed dictator game as described in the text, playing each of them in two situations, once anonymously and once non- anonymously. In each pairing, the allocator made three decisions about sharing 50 tokens between himself and the recipient. In the …rst decision the token was worth 1 point to the allocator and 3 points to the recipient; in the second decision the tokens were worth 2 points to both players; in the third decision the tokens were worth 3 points to player 1 and 1 point to the other player. One point equalled 10 cents. All decisions, situations and pairs were randomly presented to each player. One of their decisions for one pair in one situation (anonymous or non-anonymous) was randomly selected and implemented. The design ensured that each recipient was matched up with exactly one allocator during this process.27