Identify and understand pay-it-forward reciprocity using millions of online red packets

by   Yuan Yuan, et al.

Pay-it-forward reciprocity encourages the spread of prosocial behavior. However, existing empirical evidence of pay-it-forward behavior has been largely based on laboratory experiments, which are limited in sample size and external validity. Extending this research, our study uses a natural experiment to examine pay-it-forward reciprocity in a real-life context with a large-scale dataset of 3.4 million users of an online platform. Our natural experiment is enabled by the randomness in the mechanism that WeChat, a Chinese online social networking platform, uses to split an online monetary gift (also known as a "red packet") to its recipients. Our results show that recipients on average pay forward 10.34 draw" recipients, or those who obtain the largest shares of their corresponding red packets, are 1.5 times more likely to pay it forward than other recipients. Our analyses indicate that in a multiple recipient setting, users' pay-it-forward behavior is enforced by a group norm that luckiest draw recipients should send the first subsequent gift and promoted by their distributional social preferences of the random amounts split by the platform. Finally, our study shows that those recipients without any in-group friends do pay it forward, even though their pay-it-forward behavior is less likely to be driven by their reputational concerns among acquaintances. Overall, our work provides insights into mechanisms and conditions that encourage pay-it-forward reciprocity, which have implications for fostering prosocial behavior.


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