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In-group and Out-group Biases in the Marketplace: A Field Experiment during the World Cup

Author

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  • Sang-Hyun Kim

    (University of East Anglia)

  • Fernanda L. Lopez de Leon

    (University of Kent)

Abstract

We investigate the effects of group identity on discrimination by conducting an audit study in electronics markets in Sao Paulo, Brazil during the 2014 Brazil World Cup (WC). To manipulate the visibility of buyers? group membership we made them wear shirts of national football teams, and exploit the outcomes of the WC matches, which arguably affected the salience of sellers?group identity. Although we ?nd that foreigners are overcharged, we do not detect discrimination against buyers wearing a rival team shirt. In contrast, we do detect in-group market favouritism (i.e., lower prices) towards buyers wearing the Brazil shirt when Brazil had won a match in the very recent past. Our analysis rejects the explanation that sellers?behaviour were always motivated by economic pro?ts. Instead, the results indicate taste-based discrimination (Becker, 1957) and shed light on the ways in which in-group and out-group biases occur in market outcomes.

Suggested Citation

  • Sang-Hyun Kim & Fernanda L. Lopez de Leon, 2016. "In-group and Out-group Biases in the Marketplace: A Field Experiment during the World Cup," Working papers 2016rwp-100, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2016rwp-100
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    References listed on IDEAS

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    Cited by:

    1. Zamora, Paula & Mantilla, César & Blanco, Mariana, 2021. "Price discrimination in informal labor markets in Bogotá: an audit experiment during the 2018 FIFA World Cup," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-6.
    2. Gaddis, S. Michael, 2018. "An Introduction to Audit Studies in the Social Sciences," SocArXiv e5hfc, Center for Open Science.
    3. Delaporte, Isaure, 2019. "The Effect of 9/11 on Immigrants' Ethnic Identity and Employment: Evidence from Germany," GLO Discussion Paper Series 353, Global Labor Organization (GLO).

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    More about this item

    Keywords

    in-group and out-group discrimination; bargaining in the marketplace;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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