Social Contagion of Gift Exchange in Online Groups

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.