DOES SOCIAL-EXCHANGE INCREASE VOLUNTARY COOPERATION

There is a lot of empirical and experimental evidence that people give considerable amounts to charities and contribute to public goods. In many cases fellow citizens get to know the contributions of the donato rs. This suggests that cooperative behaviour is - at least partly - dr iven by desire to gain social approval. In this paper an experimental design is developed that allows to test the hypothesis that social exc hanges between voluntary cooperation and social approval enhance coope rative behaviour in the presence of free-riding incentives. Our result s indicate that among strangers the opportunity for social exchanges d oes not increase cooperation rates.