Group Payoffs As Public Signals

Ioannou, Christos A., Qi, Shi and Rustichini, Aldo (2011) Group Payoffs As Public Signals. Southampton, GB, University of Southampton, 38pp. (Discussion Papers in Economics and Econometrics, 1106).


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We study experimentally the effect on individual behavior of group identity and group payoffs in a near-minimal setting, by testing the hypothesis that the display of group payoffs, when interacting with group identity, affects individual behavior even when group identity alone does not. Our novel design
incorporates a display of group payoffs, which has no effect on agents' earnings, 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. Data analysis shows that group identity alone does not produce significant behavioral differences. Instead, the display of group payoffs 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 payoffs. We conclude that determinants of individual behavior in group settings are complex, and may also involve cognitive channels, such as focal
coordination, psychological competition, team reasoning or group-based information saliency.

Item Type: Monograph (Discussion Paper)
ISSNs: 0966-4246 (electronic)
Related URLs:
Keywords: Groups, Trust Game, Dictator Game, Focal Point Effects, Reciprocity
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HM Sociology
Divisions: University Structure - Pre August 2011 > School of Social Sciences > Economics
Faculty of Social and Human Sciences > Social Sciences > Economics
ePrint ID: 174997
Date Deposited: 21 Feb 2011 09:58
Last Modified: 18 Dec 2014 23:25

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