Group Outcomes And Group Behavior

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Description/Abstract

We study experimentally the effect on individual behavior of group identity and group outcomes in a near-minimal setting, by testing the hypothesis that the display of group outcomes, when interacting with group identity, affects group behavior even when group identity alone does not. Our novel design incorporates a display of group outcomes which has no effect on agents' payoffs, 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, thus highlighting different ways in which group outcomes affect behavior.
Data analysis shows that group identity alone does not produce significant behavioral differences. Instead, the display of group outcomes 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 outcomes. We conclude that the shaping of group identity is a process that should not be considered complete after the initial identification phase. A stronger group identity is in our data the outcome, rather than the cause, of more cooperative in-group behavior.