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Group Identity and Discrimination in Small Markets: Asymmetry of In-Group Favors

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  • Gerhard Riener

    ()
    (Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Jena)

  • Alexander Schacht

    ()
    (Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Jena)

Abstract

We experimentally study the inuence of induced group identity on the determination of prices and beliefs in a small market game. We create group identity through a focal point coordination game. Subjects play a three-person bargaining game where one seller can sell an indivisible good to one of two competing buyers under four different treatments varying the buyer-seller constellation. We find evidence of in group favoritism on the buyer side. However we do not detect a lower ask prices for in-group sellers for in-group buyers, indicating that in-group favoritism is in favor of the more powerful market participant.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-043.

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Date of creation: 07 Oct 2011
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Handle: RePEc:jrp:jrpwrp:2011-043

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Keywords: Group identity; Experiments; Markets; Bargaining;

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Cited by:
  1. Weng, Qian, 2013. "Session Size and its Effect on Identity Building: Evidence from a public goods experiment," Working Papers in Economics, University of Gothenburg, Department of Economics 560, University of Gothenburg, Department of Economics.

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