Our study seeks to identify the social contagion of in-group gifts: if gifts trigger their recipients to send more gifts subsequently, the actual impact of a gift on group dynamics would be greatly amplified. Causal identification of contagion is always challenging in observational data; To identify gift contagion , we leverage a natural experiment using a large sample of 36 million online red packets sent within 174,131 chat groups on WeChat, one of the largest social network services worldwide . Our natural experiment is enabled by WeChat's random gift amount algorithm, with which the amount that a user receives does not depend on her own attributes. We find that, on average, receiving one more dollar causes a recipient to send 18 cents back to the group within the subsequent 24 hours. Moreover, this effect is much stronger for "luckiest draw" recipients or those who receive the largest share from a red packet, suggesting a group norm according to which the luckiest draw recipients should send the first subsequent red packets. Additionally, we find that gift contagion is affected by in-group friendship network properties, such as the number of in-group friends and the local clustering coefficient .
Gifts are important instruments for forming bonds in interpersonal relationships. Our study analyzes the phenomenon of gift contagion in online groups. Gift contagion encourages social bonds of prompting further gifts; it may also promote group interaction and solidarity. Using data on 36 million online red packet gifts on China's social site WeChat, we leverage a natural experimental design to identify the social contagion of gift giving in online groups . Our natural experiment is enabled by the randomization of the gift amount allocation algorithm on WeChat, which addresses the common challenge of causal identifications in observational data. Our study provides evidence of gift contagion: on average, receiving one additional dollar causes a recipient to send 18 cents back to the group within the subsequent 24 hours. Decomposing this effect, we find that it is mainly driven by the extensive margin -- more recipients are triggered to send red packets. Moreover, we find that this effect is stronger for "luckiest draw" recipients , suggesting the presence of a group norm regarding the next red packet sender. Finally, we investigate the moderating effects of group- and individual-level social network characteristics on gift contagion as well as the causal impact of receiving gifts on group network structure. Our study has implications for promoting group dynamics and designing marketing strategies for product adoption .
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Our study seeks to identify the social contagion of in-group gifts: if gifts trigger their recipients to send more gifts subsequently, the actual impact of a gift on group dynamics would be greatly amplified. Causal identification of contagion is always challenging in observational data; To identify gift contagion , we leverage a natural experiment using a large sample of
Gifts are important instruments for forming bonds in interpersonal relationships. Our study analyzes the phenomenon of gift contagion in online groups. Gift contagion encourages social bonds of prompting further gifts; it may also promote group interaction and solidarity. Using data on
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packets sent within 174,131 chat groups on WeChat, one of the largest social network services worldwide
packet gifts on China's social site WeChat, we leverage a natural experimental design to identify the social contagion of gift giving in online groups
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WeChat's random gift amount algorithm, with which the amount that a user receives does not depend on her own attributes. We find that,
the randomization of the gift amount allocation algorithm on WeChat, which addresses the common challenge of causal identifications in observational data. Our study provides evidence of gift contagion:
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Decomposing this effect, we find that it is mainly driven by the extensive margin -- more recipients are triggered to send red packets. Moreover, we find that
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according to which the luckiest draw recipients should send the first subsequent red packets. Additionally, we find that gift contagion is affected by in-group friendship network properties, such as the number of in-group friends and the local clustering coefficient
regarding the next red packet sender. Finally, we investigate the moderating effects of group- and individual-level social network characteristics on gift contagion as well as the causal impact of receiving gifts on group network structure. Our study has implications for promoting group dynamics and designing marketing strategies for product adoption