Group Payoffs as Public Signals

Ioannou, Christos A., Qi, Shi and Rustichini, Aldo (2015) Group Payoffs as Public Signals Journal of Economic Psychology (doi:10.1016/j.joep.2015.03.003).


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We study experimentally the effect on individual behavior of comparative, but payoff-irrelevant, information in a near-minimal group setting. Specifically, in each round, group members see the groups' cumulative payoffs, which consist of an aggregation of the earnings of each member of the group in the round. Our novel experimental design incorporates two games (the Trust game and the Dictator game) whose payoffs are carefully chosen to ensure cross-game comparability. In the baseline, no comparative information is displayed; the sessions are otherwise identical. Our first set of results shows that the display is sufficient to induce an in-group bias, which can neither be attributed to mere categorization of subjects into groups nor to a stronger sense of group identity as a result of the display. Moreover, we corroborate existing results, which find that, relative to the baseline, the display is welfare reducing in the Trust game. Our second set of results shows that when comparing the allocators' decisions across the two games, a first mover's trust is reciprocated by the second mover independently of group identity.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1016/j.joep.2015.03.003
ISSNs: 0167-4870 (print)
Related URLs:
Keywords: Groups, Trust Game, Dictator Game, Focal Point Effects, Reciprocity
Organisations: Economics
ePrint ID: 174997
Date :
Date Event
June 2015Published
Date Deposited: 21 Feb 2011 09:58
Last Modified: 18 Apr 2017 03:08
Further Information:Google Scholar

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