The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence using Random Assignment to Real Social Groups
AbstractDue to incomplete contracts, efficiency of an organization depends on willingness of individuals to take non-selfish actions, e.g., cooperate when there is no incentive to do so, or punish inefficient actions by others. Organizations also constitute a social boundary, or group. We investigate whether this social aspect of organizations has an important benefit, fostering unselfish cooperation and norm enforcement within the group, but whether there is also a dark side, in the form of hostility between groups. Our experiment provides the first evidence without the confounding effect of self-selection into groups. Individuals are randomly assigned to different platoons during a four-week portion of officer training in the Swiss Army. We conduct choice experiments – simultaneous prisoner’s dilemma games, with and without third-party punishment – in week three. Random assignment significantly increases willingness to cooperate with fellow platoon members. Assignment does not lead to hostility, in the sense of vindictive punishment of outsiders, but does affect norm enforcement, enhancing willingness to enforce a norm of cooperation towards fellow platoon members. This suggests that the social aspect of organizations motivates efficient behavior even when ordinary incentives fail, and helps explain practices designed to foster social ties or group identification within an organization.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2020.
Length: 24 pages
Date of creation: Mar 2006
Date of revision:
Publication status: published in: American Economic Review, 2006, 96 (2), 212-216
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Other versions of this item:
- Lorenz Goette & David Huffman & Stephan Meier, 2006. "The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups," American Economic Review, American Economic Association, vol. 96(2), pages 212-216, May.
- Lorenz Goette & David Huffman & Stephan Meier, 2006. "The impact of group membership on cooperation and norm enforcement: evidence using random assignment to real social groups," Working Papers 06-7, Federal Reserve Bank of Boston.
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- J00 - Labor and Demographic Economics - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-18 (All new papers)
- NEP-CBE-2006-03-18 (Cognitive & Behavioural Economics)
- NEP-EVO-2006-03-18 (Evolutionary Economics)
- NEP-EXP-2006-03-18 (Experimental Economics)
- NEP-SOC-2006-03-18 (Social Norms & Social Capital)
- NEP-URE-2006-03-18 (Urban & Real Estate Economics)
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