Experiments on Social Safety Nets

“Experiments on Social Safety Nets,” Peter DeScioli, Scott Bokemper, Stony Brook University.

Many workers face uncertain job markets and uncertainty about their income next year, month, or even tomorrow. Unemployed workers can request aid from peers or government sources but they might claim they need assistance when they do not. How can individuals decide whether a worker honestly needs help? Treatments in three experiments will vary whether the same partners interact repeatedly, with a partner of their choosing, or a new partner each period. We test how these different interaction protocols enable honest communication to help individuals insure each other against short-term hardship. Can reciprocity and partner selection promote honest signaling to achieve socially desirable outcomes? How can honest communication allow individuals to create a social safety net when help comes from other individuals or a central institution? What is the role of reciprocity in facilitating long run cooperative benefit to outweigh strategic short term benefit from defection?  Understanding how people’s select choice can eliminate subtle cheating is a key challenge for understanding exchange.