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    1. Falk: University of Bonn, Lennéstr. 43, D-53113 Bonn, Germany; CESifo, Munich; IZA, Bonn; CEPR, London. Phone +49-228-73-9240, Fax +49-228-73-9239, E-mail
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    1. Fischbacher: University of Konstanz, PO Box D 131, D-78457 Konstanz, Germany; Thurgau Institute of Economics, Hauptstrasse 90, CH-8280 Kreuzlingen, Switzerland. Phone +41-71677-0512, Fax +41-71677-0511, E-mail;
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    1. Gächter: University of Nottingham, School of Economics, The Sir Clive Granger Building, University Park, Nottingham NG7 2RD, UK; CESifo, Munich; IZA, Bonn. Phone +44-115-846-6132, Fax +44-115-951-4159, E-mail
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    • This paper was funded under the EU-TMR project ENDEAR (FMRX CT98-0238). Lukas Baumann, Michael Bolliger, Esther Kessler, and Christian Thöni provided very valuable research assistance. We received helpful comments from the referees and Gary Charness, Alan Durell, Stefano DellaVigna, Claudia Keser, Manfred Königstein, Michael Kosfeld, Charles Manski, Shepley Orr, Ekkehart Schlicht, Jason Shachat, Frans van Winden, and participants at seminars and conferences in Amsterdam, Berlin, Boston, Essen, IBM T.J Watson (Yorktown Heights, USA), Jena, London, Munich, Norwich, St. Gallen, Venice, and Zürich. Simon Gächter gratefully acknowledges the hospitality of CES Munich, the University of Maastricht, and Bar-Ilan University (Israel) while working on this paper.


Field evidence suggests that people belonging to the same group often behave similarly, that is, behavior exhibits social interaction effects. We conduct a laboratory experiment that avoids the identification problem present in the field and allows us to study the behavioral logic of social interaction effects. Our novel design feature is that each subject is simultaneously a member of two randomly assigned and identical groups where only members (“neighbors”) are different. We study behavior in a coordination game with multiple equilibria and a public goods game, which has only one equilibrium in material payoffs. We speak of social interactions if the same subject at the same time makes group-specific decisions that depend on their respective neighbors' decisions. We find that a majority of subjects exhibit social interaction effects both when the game has multiple equilibria in material payoffs and when it only has one equilibrium. (JEL C91, H41, K42, H26)

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