In a series of experiments, we compare a situation where the same group of four subjects plays 25 repetitions of a public good game (partners condition) to a situation where subjects play this game in changing group formations over 25 periods (strangers condition). We observe that, on aggregate...

This discussion paper led to a publication in <A href="http://onlinelibrary.wiley.com/doi/10.1111/1467-9442.00182/abstract">'Journal of Economics'</A> 102(1) 23-39.<P>We compare a partners condition where the same small group of subjects plays arepeated public good game to astrangers condition where subjects play this game in changing group formations.Subjects in the partners...</p></a>

Economic behavior often takes place in groups of small numbers of peopleinteracting with each other (like work teams, neighborhoods, socialnetworks, etc.). Characteristic of such interaction is the development of(affective) interpersonal relationships, or social ties. According tosociologists,...