Social networks and externalities from gift exchange: Evidence from a field experiment

Janet Currie, Wanchuan Lin, Juanjuan Meng

Research output: Contribution to journalArticlepeer-review

24 Scopus citations


This paper asks whether gift exchange generates externalities for people outside of the bilateral relationship between the gift giver and recipient, and whether the nature of this relationship is affected by social networks. We examine this question in the context of a field experiment in urban Chinese hospital outpatient clinics. We first show that when patients give a small gift, doctors reciprocate with better service and a fewer unnecessary prescriptions of antibiotics. We then show that gift giving creates externalities for third parties. If two patients, A and B are perceived as unrelated, B receives worse care when A gives a gift. However, if A identifies B as a friend, then both A and B benefit from A's gift giving. Hence, we show that gift giving can create positive or negative externalities, depending on the giver's social distance to the third party.

Original languageEnglish (US)
Pages (from-to)19-30
Number of pages12
JournalJournal of Public Economics
StatePublished - Nov 2013

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Finance


  • Antibiotics prescription
  • Externalities
  • Gift exchange


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