Social Influence in Trustors' Neighborhoods

We offer new and clean evidence that social interactions impact on individuals’ choices. In an experi-mental trust game we study whether and how trustor’s behaviour is affected by social influence of othertrustors’ choices over time. We account for three important factors of trustors’ preferences: risk atti-tude, generosity and expected trustworthiness. Our results confirm that trustor’s behaviour is affectedby peers. We find a general convergence in trusting behaviour: the effect of social influence is (for mostof subjects) significantly reducing the amount sent by trustors in each period. Furthermore, analyzingcontagion within the neighbourhoods, we find that agents tend to imitate similar types ((un)-generous or(un)trusting) when placed in the same neighbourhood. Indeed – in the few neighbourhoods with a preva-lence of generous and risk-loving subjects – trust substantially increases over time. Nearness, withoutany strategic component, is a clear element of contagion in trustors’ behaviour.