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

Author

Listed:
  • 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.

Suggested Citation

  • Gerhard Riener & Alexander Schacht, 2011. "Group Identity and Discrimination in Small Markets: Asymmetry of In-Group Favors," Jena Economics Research Papers 2011-043, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2011-043
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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 560, University of Gothenburg, Department of Economics.

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    More about this item

    Keywords

    Group identity; Experiments; Markets; Bargaining;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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