Social Status and Group Norms

This paper provides experimental evidence showing that indirect reciprocity may important in economic decision making and in the development of group norms. We study a `repeated helping game' with random pairing in large groups, with individuals equally divided between donors and recipients. Donors decide whether to help the individuals they are matched with against a certain cost or not to help, enduring no costs. We observe that many decision makers respond to the information we give them about former decisions of the recipients, even if they realize that this information is based on transactions with third parties. <BR><BR>