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In-group and out-group biases in the marketplace: a field experiment during the World Cup

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  • Sang-Hyun Kim
  • Fernanda L Lopez de Leon

Abstract

We investigate the effects of group identity on discrimination by conducting an audit study in electronics markets in Brazil during the 2014 Brazil World Cup. Buyers’ group membership was identified by the shirts of the national football teams which were controlled in the experiment. We then exploit the outcomes of the WC matches, which arguably affected the salience of sellers’ group identity, to identify discrimination. Although we find 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 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 was motivated entirely by economic profits. Instead, the results are more consistent with Becker’s taste-based discrimination theory 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, 2019. "In-group and out-group biases in the marketplace: a field experiment during the World Cup," Oxford Economic Papers, Oxford University Press, vol. 71(3), pages 528-547.
  • Handle: RePEc:oup:oxecpp:v:71:y:2019:i:3:p:528-547.
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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

    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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