Department of Economics

Social facilitation describes the effect on performance due to the mere presence of others. Here we study the effect of the mere presence of an audience on the behavior of people involved in a strategic interaction and on the performance of institutions. In our laboratory experiment, two active participants play the game and receive payoffs determined by their choices, while inactive participants receive a share of this outcome. In our 2x2 design, bystanders may or not be physically present during play, and active and inactive participants may or not be immediately informed of the outcome of the game just played.

We find significant differences in behavior across treatments: When bystanders are present, players are more likely to choose the strategy favorable to the audience. Withholding immediate feedback about play weakens this effect substantially, but not completely. These results suggest that social facilitation extends to strategic environments.