IDEAS home Printed from https://ideas.repec.org/p/ags/feemcl/128705.html
   My bibliography  Save this paper

Identity, Homophily and In-Group Bias

Author

Listed:
  • Currarini, Sergio
  • Mengel, Friederike

Abstract

Many Social Interactions display either or both of the following well documented phenomena. People tend to interact with similar others (homophily). And they tend to treat others more favorably if they are perceived to share the same identity (in-group bias). While both phenomena involve some degree of discrimination towards others, a systematic study of their relations and interplay is yet missing. In this paper we report thendings of an experiment designed to address this issue. Participants are exogenously and randomly assigned to one of two groups. Subsequently they play a sequence of eight games with either an in-group or an out-group member. Wend strong evidence of in-group bias when agents are matched exogenously. When agents can a ect who they are matched with, we nd strong evidence of homophily. However, in-group biases either decrease or disappear altogether under en-dogenous matching. Self selection of homophilous agents into in-group matches alone cannot explain this fact. We also show that homophily is strongly correlated with risk aversion, and we use this fact to provide an explanation for both the existence of homophily and the disappearance of in-group biases under endogenous matching.

Suggested Citation

  • Currarini, Sergio & Mengel, Friederike, 2012. "Identity, Homophily and In-Group Bias," Climate Change and Sustainable Development 128705, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemcl:128705
    DOI: 10.22004/ag.econ.128705
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/128705/files/NDL2012-037Rev.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    2. Chakravarty, Surajeet & Fonseca, Miguel A., 2014. "The effect of social fragmentation on public good provision: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 1-9.
    3. Karni, Edi & Safra, Zvi, 1987. ""Preference Reversal' and the Observability of Preferences by Experimental Methods," Econometrica, Econometric Society, vol. 55(3), pages 675-685, May.
    4. Grossman, Zachary & van der Weele, Joël & Andrijevik, Ana, 2014. "A Test of Dual-Process Reasoning in Charitable Giving," University of California at Santa Barbara, Economics Working Paper Series qt4tm617f7, Department of Economics, UC Santa Barbara.
    5. Jörg Oechssler & Andreas Roider & Patrick W. Schmitz, 2015. "Cooling Off in Negotiations: Does it Work?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(4), pages 565-588, December.
    6. Recalde M.P. & Riedl A.M. & Vesterlund L., 2014. "Error prone inference from respons time: The case of intuitive generosity," Research Memorandum 034, Maastricht University, Graduate School of Business and Economics (GSBE).
    7. Daniel J. Benjamin & James J. Choi & A. Joshua Strickland, 2010. "Social Identity and Preferences," American Economic Review, American Economic Association, vol. 100(4), pages 1913-1928, September.
    8. Horowitz, John K., 2006. "The Becker-DeGroot-Marschak mechanism is not necessarily incentive compatible, even for non-random goods," Economics Letters, Elsevier, vol. 93(1), pages 6-11, October.
    9. Recalde, María P. & Riedl, Arno & Vesterlund, Lise, 2018. "Error-prone inference from response time: The case of intuitive generosity in public-good games," Journal of Public Economics, Elsevier, vol. 160(C), pages 132-147.
    10. Claudia Keser & Frans Van Winden, 2000. "Conditional Cooperation and Voluntary Contributions to Public Goods," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 23-39, March.
    11. Charness, Gary & Cobo-Reyes, Ramón & Jiménez, Natalia, 2014. "Identities, selection, and contributions in a public-goods game," Games and Economic Behavior, Elsevier, vol. 87(C), pages 322-338.
    12. Gary Charness & Luca Rigotti & Aldo Rustichini, 2007. "Individual Behavior and Group Membership," American Economic Review, American Economic Association, vol. 97(4), pages 1340-1352, September.
    13. Iris Bohnet & Benedikt Herrmann & Richard Zeckhauser, 2010. "Trust and the Reference Points for Trustworthiness in Gulf and Western Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 811-828.
    14. Piovesan, Marco & Wengström, Erik, 2009. "Fast or fair? A study of response times," Economics Letters, Elsevier, vol. 105(2), pages 193-196, November.
    15. Eckel, Catherine C. & Grossman, Philip J., 2005. "Managing diversity by creating team identity," Journal of Economic Behavior & Organization, Elsevier, vol. 58(3), pages 371-392, November.
    16. Roy Chen & Yan Chen, 2011. "The Potential of Social Identity for Equilibrium Selection," American Economic Review, American Economic Association, vol. 101(6), pages 2562-2589, October.
    17. Giorgio Coricelli & Dietmar Fehr & Gerlinde Fellner, 2004. "Partner Selection in Public Goods Experiments," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(3), pages 356-378, June.
    18. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-457, March.
    19. Grimm, Veronika & Mengel, Friederike, 2009. "Cooperation in viscous populations--Experimental evidence," Games and Economic Behavior, Elsevier, vol. 66(1), pages 202-220, May.
    20. Fehr, Dietmar & Hakimov, Rustamdjan & Kübler, Dorothea, 2015. "The willingness to pay–willingness to accept gap: A failed replication of Plott and Zeiler," European Economic Review, Elsevier, vol. 78(C), pages 120-128.
    21. Sergio Currarini & Matthew O. Jackson & Paolo Pin, 2009. "An Economic Model of Friendship: Homophily, Minorities, and Segregation," Econometrica, Econometric Society, vol. 77(4), pages 1003-1045, July.
    22. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
    23. Charles R. Plott & Kathryn Zeiler, 2005. "The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations," American Economic Review, American Economic Association, vol. 95(3), pages 530-545, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dickinson, David L. & Masclet, David & Peterle, Emmanuel, 2018. "Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market," European Economic Review, Elsevier, vol. 104(C), pages 220-236.
    2. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2013. "Language Skills and Homophilous Hiring Discrimination: Evidence from Gender-and Racially-Differentiated Applications," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00877458, HAL.
    3. Andrea F. M. Martinangeli, 2017. "Do What (You Think) the Rich Will Do: Inequality and Belief Heterogeneity in Public Good Provision," Working Papers tax-mpg-rps-2017-06_4, Max Planck Institute for Tax Law and Public Finance.
    4. Artavia-Mora, Luis & Bedi, Arjun S. & Rieger, Matthias, 2018. "Help, Prejudice and Headscarves," IZA Discussion Papers 11460, Institute of Labor Economics (IZA).
    5. Xu, Xue, 2018. "Experiments on cooperation, institutions, and social preferences," Other publications TiSEM d3cf4dba-b0f3-4643-a267-7, Tilburg University, School of Economics and Management.
    6. Anthony Edo & Nicolas Jacquemet & Constantine Yannelis, 2019. "Language skills and homophilous hiring discrimination: Evidence from gender and racially differentiated applications," Review of Economics of the Household, Springer, vol. 17(1), pages 349-376, March.
    7. Xu, Hedong & Fan, Suohai & Tian, Cunzhi & Xiao, Xinrong, 2019. "Effect of strategy-assortativity on investor sharing games in the market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 514(C), pages 211-225.
    8. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2014. "Social environment and forms of governance: Monetary and non-monetary punishment and the role of emotions," Center for European, Governance and Economic Development Research Discussion Papers 202, University of Goettingen, Department of Economics.
    9. David Hugh-Jones & Martin Alois Leroch, 2017. "Intergroup Revenge: A Laboratory Experiment," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 34(2), pages 117-135, November.
    10. Kets, Willemien & Sandroni, Alvaro, 2019. "A belief-based theory of homophily," Games and Economic Behavior, Elsevier, vol. 115(C), pages 410-435.
    11. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    12. Hakobyana, Zaruhi & Koulovatianos, Christos, 2019. "Populism and polarization in social media without fake news: The vicious circle of biases, beliefs and network homophily," CFS Working Paper Series 626, Center for Financial Studies (CFS).
    13. Daskalova, Vessela, 2018. "Discrimination, social identity, and coordination: An experiment," Games and Economic Behavior, Elsevier, vol. 107(C), pages 238-252.
    14. Florian Hett & Markus Kröll & Mario Mechtel, 2019. "Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identification Preferences," Working Papers 1903, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    15. Hett, Florian & Kröll, Markus & Mechtel, Mario, 2017. "Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identification Preferences," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168223, Verein für Socialpolitik / German Economic Association.
    16. Bilancini, Ennio & Boncinelli, Leonardo & Wu, Jiabin, 2018. "The interplay of cultural intolerance and action-assortativity for the emergence of cooperation and homophily," European Economic Review, Elsevier, vol. 102(C), pages 1-18.

    More about this item

    Keywords

    Political Economy;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:feemcl:128705. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/feemmit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.