An image of a red envelope with the wechat loogo on it.
We Chat; Pixabay

Humans and Technology

WeChat is running a natural experiment in human generosity

Altruism is a puzzle for behavioral biologists. Now the largest-ever study of pay-it-forward reciprocity is throwing new light on the phenomenon.

An image of a red envelope with the wechat loogo on it.

Back in 2014, the Chinese web giant WeChat launched an unusual application. Called Red Packet, it allows users to donate money to a group of friends or contacts. The concept is based on the Chinese tradition of hongbao (“red packet”), where people give money to friends or relatives as a gift.

However, there is a twist—WeChat does not divide the money equally between the recipients. Instead, the money is split randomly. Once the division has taken place, the amount each recipient receives is revealed and the person with the largest slice of the pie is crowned the “luckiest draw recipient.”

That has made possible an unusual study. Recipients often share their luck by sending a portion of their winnings to other people, “paying it forward.”  But little is known about this behavior, how it arises, and how people respond to it. For example, do people who receive more give greater sums away?

Today, that changes thanks to the work of Yuan Yuan at MIT and colleagues. In the first large-scale study of pay-it-forward behavior, they have studied the online behavior of 3.4 million people who have used the WeChat red packet applications. Their work provides unique insight into a form of prosocial activity that could have profound implications for society. ”Our natural experiment is enabled by the randomness in the mechanism that WeChat uses,” say Yuan and co.

The pay-it-forward phenomenon is part of a broader set of cooperative behaviors that have evolved in humans. For many years, the origin of cooperation puzzled behavioral biologists, who reasoned that all creatures should act selfishly. 

But various studies showed that cooperative behavior benefits everyone involved. It is summed up by the motto “You scratch my back, I'll scratch yours.” 

Pay-it-forward behavior is hard to reconcile with this view, though, since there is no guarantee that the donor will be repaid. Indeed, it could be summed up as “If I scratch your back, will you scratch somebody else’s?”

Research in this area has been hampered by the difficulty of observing pay-it-forward behavior in real life. Consequently, the only studies have been done on a small scale, in artificial circumstances, and usually with students who are generally unrepresentative of the population as a whole. 

But the Red Packet app has gathered a huge amount of data involving ordinary people in China in real-life situations between 2015 and the present. Together, these people distributed 36 million red packets worth 160 million Chinese yuan, equivalent to $24 million.

The key question that Yuan and co investigate is whether recipients of a red packet are then inspired to send their own red packet—in other words, is this kind of prosocial behavior infectious?

The answer is that recipients do pass on their good fortune. “Our results show that recipients on average pay forward 10.34% of the amount they receive,” say Yuan and co.

The luckiest draw recipients are even more generous. “We further find that ‘luckiest draw’ recipients, or those who obtain the largest shares of their corresponding red packets, are 1.5 times more likely to pay it forward than other recipients,” they say.

Just why this happens isn’t clear. However, Yuan and co speculate that there is considerable social pressure on luckiest draw recipients because their share of the prize is shown to everybody.

Another interesting question is why people engage in pay-it-forward activity at all. One possible answer is that it increases the chances that donors will themselves benefit from this kind of behavior. Indeed, it is not hard to imagine the circumstances in which such behavior could spread in an explosive chain-like reaction.

But this does not happen on WeChat. Instead, donors on average receive back about 3% of the amount they include in a red packet. That suggests a certain altruism at work.

That’s interesting work that reveals some of the mechanisms behind this kind of prosocial behavior. The next step, of course, is to find ways of making it happen in other circumstances. That may be difficult. Many types of pay-it-forward behavior are hard to monitor, and  Western social-media companies have yet to include WeChat-like functions in their platforms.

Nevertheless, pay-it-forward behavior has spread widely in recent years, promoted by various nonprofit foundations around the world. There is even a film of the same name. The hope is that this behavior can make a substantial positive difference to the way people interact and to society as a whole. Time to act!

Ref: arxiv.org/abs/1906.09698 : Identify and Understand Pay-It-Forward Reciprocity Using Millions of Online Red Packets