[Paper Review] Social Contagion of Gift Exchange in Online Groups

Yuan Yuan, Tracy Liu+4 more|arXiv (Cornell University)|Jun 24, 2019

Experimental Behavioral Economics Studies1 citations

TL;DR

This study identifies the causal effect of receiving online red packets (gifts) in WeChat groups on subsequent gifting behavior using a natural experiment based on random allocation. It finds that recipients on average repay 18.29% of the received amount, with draw recipients repaying 1.5 times more, revealing a norm of reciprocity driven by perceived luck and social expectations.

ABSTRACT

Does receiving a gift encourage the recipient to send more gifts? Causal identification of behavioral contagion is very challenging, especially based on observational data from social networks. Given that the online monetary gift (also known as a packet) in WeChat groups is randomly split between group members, we are able to conduct a natural experiment to identify the causal effect of receiving online red packets on the contagion of gift exchange. Analyzing gifting behavior using a large-scale dataset of 3.4 million WeChat users, we find that recipients on average repay 18.29% of the amount they receive. Moreover, our analysis shows that recipients' contagion may be driven by different types of reciprocity. We further find that the draw recipients repay 1.5 times more than other recipients, and identify a group norm that luckiest draw recipients should send payment back to the group.

Motivation & Objective

• To investigate whether receiving a gift in online groups triggers increased gift-giving behavior, or behavioral contagion.
• To identify the causal effect of gift receipt on subsequent gifting using observational data from a real-world social platform.
• To examine the role of different reciprocity mechanisms—particularly luck-based draws—in shaping gift-giving norms.
• To uncover social norms around repayment, especially for recipients who win the 'luckiest' draw.

Proposed method

• Leveraged the random allocation mechanism of WeChat red packets, which splits monetary gifts randomly among group members, enabling a natural experiment.
• Used a large-scale dataset of 3.4 million WeChat users to analyze gifting behavior across multiple group interactions.
• Applied causal inference techniques to isolate the effect of receiving a gift on subsequent gifting behavior, controlling for group-level and individual-level heterogeneity.
• Distinguished between regular recipients and 'draw' recipients (those who won a random share) to assess differential repayment behavior.
• Modeled repayment behavior as a function of received amount and recipient type, identifying normative expectations tied to perceived luck.

Experimental results

Research questions

• RQ1 Does receiving a gift in an online group lead to increased gift-giving by the recipient, indicating behavioral contagion?
• RQ2 What is the causal effect of receiving a red packet on the likelihood and magnitude of subsequent gifting?
• RQ3 How does the type of recipient—particularly 'luckiest draw' recipients—affect repayment behavior?
• RQ4 Are there social norms that compel recipients, especially those who win larger shares, to repay more?

Key findings

• Recipients on average repay 18.29% of the amount they receive in subsequent gifts, indicating measurable behavioral contagion.
• Recipients who win the 'luckiest draw' repaid 1.5 times more than other recipients, suggesting heightened social pressure to reciprocate.
• The study identifies a distinct social norm where those perceived as lucky are expected to return more to the group, reinforcing group cohesion.
• The findings demonstrate that random allocation in online gifting systems can generate predictable and norm-driven reciprocity patterns.