We experimentally investigate the relationship between an investor and a project manager. Project managers choose from a pool of projects, the success probabilities of which are uncertain. Information about the future success probability of a project is gained by observing its outcome. Investors can change projects, but also have to change project managers if they want to do so. An additional joint project or a volun- tary transfer precedes their interaction. We hypothesize that investors favor projects that are managed by project managers with whom they have shared positive experi- ences in the past, even though these past experiences do not provide any information about a project’s success probability. The role of this social element is isolated using a control treatment in which the role of the project manager does not exist. Interaction through a voluntary transfer plays a clear and significant role in the investors’ decision making, whereas the influence of merely sharing a positive or negative experience proves more complex.
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Socially destructive behavior in a public good environment–like damaging public goods–is an underexposed phenomenon in economics. In an experiment we investigate whether such behavior can be influenced by the very nature of an environment. To that purpose we use a Fragile Public Good (FPG) game which puts the opportunity for destructive behavior (taking) on a level playing field with constructive behavior (contributing). We find substantial evidence of destructive decisions, sometimes leading to sour relationships characterized by persistent hurtful behavior. While positive framing induces fewer destructive decisions, shifting the selfish Nash towards minimal taking doubles its share to more than 20%.
We analyze the development of positive and negative and social ties using a functional magnetic resonance imaging experiment, in which participants are partaking in a live interaction with other participants. We observe very diverse behavioral patterns in our subjects. Contribution and social value orientation are found to correlate with activation in the dorsomedial prefrontal cortex and differences in income between self and other are correlate with activity in the posterior superior temporal sulcus.