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Group Identity in Intermediated Interactions: Lessons from a Trust Game with Delegation in South Africa

In: Experimental Economics and Culture

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  • Hanjo Hamann
  • Nicky Nicholls

Abstract

We investigate the role of group identity in delegated decision-making. Our framework considers the impact of group identity (based on racial segregation in post-Apartheid South Africa) on decisions to appoint a representative in a trust game with delegated decision-making, where information on the race group of other players is either common or private knowledge. We test our framework experimentally on a sample of young South Africans who had never been exposed to experimental economics research. By exogenously matching parties according to their race group, we observe their endogenous trust and delegation behavior. Our results suggest that white players try to use information about group identity to increase profits, albeit unsuccessfully. This may help to explain distrust and coordination failures observed in real-life interactions.

Suggested Citation

  • Hanjo Hamann & Nicky Nicholls, 2018. "Group Identity in Intermediated Interactions: Lessons from a Trust Game with Delegation in South Africa," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 227-264, Emerald Group Publishing Limited.
  • Handle: RePEc:eme:rexezz:s0193-230620180000020008
    DOI: 10.1108/S0193-230620180000020008
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    Citations

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    Cited by:

    1. Chisadza, Carolyn & Nicholls, Nicky & Yitbarek, Eleni, 2021. "Group identity in fairness decisions: Discrimination or inequality aversion?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).

    More about this item

    Keywords

    Experiment; agency; delegation; trust; group identity; race; South Africa; C91; D02; D03; D83; J15; Z13;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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