Social Networks, Reputation, and Commitment: Evidence From a Savings Monitors Experiment

By Emily Breza, Arun G. Chandrasekhar. Econometrica, 2019

127 citations recorded by the source corpus.

We conduct an experiment to study whether individuals save more when information about the progress toward their self‐set savings goal is shared with another village member (a “monitor”). We develop a reputational framework to explore how a monitor's effectiveness depends on her network position. Savers who care about whether others perceive them as responsible should save more with central monitors, who more widely disseminate information, and proximate monitors, who pass information to individuals with whom the saver interacts frequently. We randomly assign monitors to savers and find that monitors on average increase savings by 36%. Consistent with the framework, more central and proximate monitors lead to larger increases in savings. Moreover, information flows through the network, with 63% of monitors telling others about the saver's progress. Fifteen months after the conclusion of the experiment, other villagers have updated their beliefs about the saver's responsibility in response to the intervention.

Subfields: Accounting, Economics and Econometrics, Safety Research

View Paper: https://www.semanticscholar.org/paper/22b682a4444150a293b144d8dac55e9d5d33c53d

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Citations in the corpus

The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor (2018, background): “2013), savings groups that leverage peer pressure and support (Kast et al. 2013; Dupas and Robinson 2014; Breza and Chandrasekhar 2015), and deposit collection services (Ashraf et al.”
Banking on Trust: How Debit Cards Enable the Poor to Save More (2017, background): “These savings rates approach the savings goals that individuals set in Breza and Chandrasekhar (2015).”
Changes in Social Network Structure in Response to Exposure to Formal Credit Markets (2021, unknown): “(2020) show that using ARD, it is possible to replicate the results in Breza and Chandrasekhar (2019) comparably well as when the entire network is observed.”