Group Payoffs As Public Signals
AbstractWe study experimentally the effect on individual behavior of group identity and group payoffs in a near-minimal setting, by testing the hypothesis that the display of group payoffs, when interacting with group identity, affects individual behavior even when group identity alone does not. Our novel design incorporates a display of group payoffs, which has no effect on agents' earnings, but provides information on other players' behavior. We also choose payments in the Dictator and Trust game to ensure that payoffs in the two games are comparable. Data analysis shows that group identity alone does not produce significant behavioral differences. Instead, the display of group payoffs induces in-group cooperation and favoritism, and out-group discrimination. This effect operates in different ways in the two games, reflecting the difference in the information provided by the display of group payoffs. We conclude that determinants of individual behavior in group settings are complex, and may also involve cognitive channels, such as focal coordination, psychological competition, team reasoning or group-based information saliency. Keywords; Groups, Trust Game, Dictator Game, Focal Point Effects, Reciprocity
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Bibliographic InfoPaper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 1106.
Date of creation: 08 Apr 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-14 (All new papers)
- NEP-CBE-2011-11-14 (Cognitive & Behavioural Economics)
- NEP-EVO-2011-11-14 (Evolutionary Economics)
- NEP-EXP-2011-11-14 (Experimental Economics)
- NEP-GTH-2011-11-14 (Game Theory)
- NEP-MIC-2011-11-14 (Microeconomics)
- NEP-SOC-2011-11-14 (Social Norms & Social Capital)
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