Spillover Effects Across Interactive Environments and Social Pollution

This is a double seminar with Marina Nunez (University of Barcelona, Spain). Check here.

Abstract: We study spillover effects of negative experiences across different interactive environments. Specifically, we investigate how exposure to unfairness or exploitation in one environment affects individuals’ prosocial behaviour in a completely separate environment. Our experimental design consists of two stages. In Stage 1, some participants (Stakeholders) may become a victim of exploitation by other participants (Powerholders) who determine the distribution of jointly generated profits. In Stage 2, participants interact with entirely new partners and play a battery of three games: The Trust Game, the Public Goods Game, and the Prisoner’s Dilemma. We find that the experiences in Stage 1 influence prosocial behaviour in Stage 2 for both Stakeholders and Powerholders. Among Stakeholders, experiences of unfairness reduce their propensity to cooperate and to trust the new partners. To increase the likelihood of exploitative outcomes and to study its effect also on Powerholders, we introduce a randomly acting virtual Powerholder which may change the choices of human Powerholder in Stage 1. We find that human Powerholders who unintentionally exploit others due to intervention by the virtual Powerholder also exhibit a decline in prosocial behaviour in Stage 2. We interpret these results in the context of spillover effects in economic and social environments. These results may also contribute to the debate regarding whether toxic workplaces should remain an internal matter for the companies that admit them, or whether, in view of potential social pollution beyond the workplace, they should also be treated as a public policy concern. Joint paper with Lihui Lin and Jiwei Zheng.