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Journal Article•DOI•

Individual Behavior and Group Membership

Gary Charness1, Luca Rigotti2, Aldo Rustichini3•
University of California, Santa Barbara1, University of Pittsburgh2, University of Minnesota3
21 Dec 2006-Social Science Research Network-
TL;DR: In this paper, the saliency of group membership was investigated in two strategic games, the Battle of the Sexes and Prisoner's Dilemma, and it was shown that saliency affects the perception of the environment.
Abstract: People who are members of a group and identify with it behave differently from people who perceive themselves as isolated individuals. This difference depends on two main factors. First, preferences over outcomes change with the degree of identification with the group. Second, this identification depends on the saliency of the group structure. This paper tests these hypotheses and shows that group membership affects preferences over outcomes, and saliency of the group affects the perception of the environment. In two strategic environments, Battle of the Sexes and Prisoner's Dilemma, we create groups by allocating subjects to be Row or Column players. We manipulate the saliency of group membership by letting a player's own group watch as a passive audience as decisions are made, and by making part of the payoff common for members of the group. There is a strong and significant effect of group membership: It increases the aggressive stance of the hosts (people who have their group members in the audience), and reduces the one of the guests. The effect on outcomes depends on the game: In the Battle of the Sexes, the aggressiveness of hosts leads to more coordination; in the Prisoner's Dilemma, it leads to less cooperation. In the first case efficiency is increased, while in the second it is diminished. We also test for differences between in-group and out-group behavior in Prisoner's Dilemma games. In contrast to the minimal-group paradigm of the social-psychology literature, minimal groups do not affect behavior in our strategic environment. We see strong differences between in-group and out-group behavior only when we increase the saliency of group membership by having a degree of common payoffs.

Summary (1 min read)

Jump to: [INSTRUCTIONS (room R)] and [INSTRUCTIONS]

INSTRUCTIONS (room R)

  • They have been randomly divided into two rooms, each with 10 people.
  • These are actual dollars that will be paid in cash.
  • All people in the room (except for the person from the other room) will be able to watch the decider who belongs to their room make his or her choice (however, no verbal comments are permitted).
  • Your green numbers indicate the rounds during which it will be your turn to make a decision in the room where you are now (room R).

INSTRUCTIONS

  • Thank you for participating in this experiment.
  • There are 20 people participating in this session.
  • There will be 10 rounds in this session, and each person will make a decision in each round.
  • In some periods, you will be paired with someone in your color group, while in other periods you will be paired with someone in the other color group.
  • Each person will be making a simultaneous choice between A and B in the following decision matrix:.

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APPENDIX A: Instructions
(Prisoner’s Dilemma)
INSTRUCTIONS (room R)
Thank you for participating in this experiment. You will receive $5 for your participation, in addition to other
money to be paid as a result of decisions made in the experiment.
There are 20 people participating in this session. They have been randomly divided into two rooms, each with 10
people. You are in room R, this means you are a Row decider.
There will be ten rounds in this session
, and each person will make two decisions, one in each room. You have a
card with a green number and a card with a (different) yellow number. These numbers will determine when and
where you make decisions.
Your green number indicates the round during which it will be your turn to make a decision in the room where
you are now (room R).
Your yellow number indicates the round during which it will be your turn to go to the other room (room C) and
make a decision there.
In each round there are two people making a decision. Each person will be making a simultaneous choice between A
and B in the following decision matrix:
Column
A B
A 5 , 5 1 , 7
Row
B 7 , 1 2 , 2
In each cell, the first number represents the outcome for the Row decider and the second number represents the
outcome for the Column decider.
Thus, if both people choose A, the Row decider receives 5 and the Column decider receives 5. If both people choose
B, the Row decider receives 2 and the Column decider receives 2. If the Row decider chooses A and the Column
decider chooses B, the Row decider receives 1 and the Column decider receives 7. If the Row decider chooses B and
the Column decider chooses A, the Row decider receives 7 and the Column decider receives 1.
The other nine members of each room also have a financial stake in the outcome – each person not making a
decision receives 1/3 of the amount shown for the realized outcome.
Thus, if both deciders choose A, every inactive person in room R receives 5/3 and every inactive person from room
C receives 5/3. If both deciders choose B, every inactive person from room R receives 2/3 and every inactive person
from room C receives 2/3. If the Row decider chooses A and the Column decider chooses B, every inactive person
from room R receives 1/3 and every inactive person from room R receives 7/3. If the Row decider chooses B and the
Column decider chooses A, every inactive person from room R receives 7/3 and every inactive person from room R
receives 1/3.
Each unit is worth $0.50 in actual money (2 units = $1) that will be paid in cash at the end of the experiment.
All people in the room (except for the person from the other room) will be able to watch the decider who belongs to
their room make his or her choice (however, no verbal comments are permitted).
The decision of the person who walks into the room, on the other hand, is made privately.
2
The outcome of the joint decision is immediately revealed to all people in the room.
After the 10 rounds are completed, we will total each person’s earnings (from the outcomes of the two self-made
decisions, as well as the other 18 outcomes), add the $5 show-up fee, and pay each person individually and
privately, using the numbers on your two cards to identify your decisions.
Please feel free to ask questions.
3
(Battle of the Sexes)
INSTRUCTIONS (room R)
Thank you for participating in this experiment. You will receive $5 for your participation, in addition to other
money to be paid as a result of decisions made in the experiment.
There are 20 people participating in this session. They have been randomly divided into two rooms, each with 10
people. You are in room R, this means you are a Row decider.
There will be ten rounds in this session
, and each person will make two decisions, one in each room. You have a
card with a green number and a card with a (different) yellow number. These numbers will determine when and
where you make decisions.
Your green number indicates the round during which it will be your turn to make a decision in the room where
you are now (room R).
Your yellow number indicates the round during which it will be your turn to go to the other room (room C) and
make a decision there.
In each round there are two people making a decision. Each person will be making a simultaneous choice between A
and B in the following decision matrix:
Column
A B
A 3 , 1 0 , 0
Row
B 0 , 0 1 , 3
In each cell, the first number represents the outcome for the decider Row and the second number represents the
outcome for the decider Column.
Thus, if both people choose A, the decider Row receives $3 and the decider Column receives $1. If both people
choose B, the decider Row receives $1 and the decider Column receives $3. If non-identical letters are chosen, each
decider receives 0. These are actual dollars that will be paid in cash.
The other nine members of each room also have a financial stake in the outcome – each person not making a
decision receives 1/3 of the amount shown for the realized outcome.
Thus, if both deciders choose A, every person in room R receives $1 and every person in room C receives $1/3. If
both deciders choose B, every person in room R receives $1/3 and every person in room C receives $1. If non-
identical letters are chosen, everyone receives 0. These are also actual dollars that will be paid in cash.
All people in the room (except for the person from the other room) will be able to watch the decider who belongs to
their room make his or her choice (however, no verbal comments are permitted).
The decision of the person who walks into the room, on the other hand, is made privately.
The outcome of the joint decision is immediately revealed to all people in the room.
After the 10 rounds are completed, we will total each person’s earnings (from the outcomes of the two self-made
decisions, as well as the other 18 outcomes), add the $5 show-up fee, and pay each person individually and
privately, using the numbers on your two cards to identify your decisions.
Please feel free to ask questions.
4
(Battle of the Sexes: No Shared payoff)
INSTRUCTIONS (room R)
Thank you for participating in this experiment. You will receive $8 for your participation, in addition to other
money to be paid as a result of decisions made in the experiment.
There are 20 people participating in this session. They have been randomly divided into two rooms, each with 10
people. You are in room R, this means you are a Row decider.
There will be 20 rounds in this session
, and each person will make four decisions, two in each room. You have a two
card with green numbers and two cards with (different) yellow numbers. These numbers will determine when and
where you make decisions.
Your green numbers indicate the rounds during which it will be your turn to make a decision in the room where
you are now (room R).
Your yellow numbers indicate the rounds during which it will be your turn to go to the other room (room C) and
make a decision there.
In each round there are two people making a decision in each room. Each person will be making a simultaneous
choice between A and B in the following decision matrix:
Column
A B
A 3 , 1 0 , 0
Row
B 0 , 0 1 , 3
In each cell, the first number represents the outcome for the Row decider and the second number represents the
outcome for the Column decider.
Thus, if both people choose A, the Row decider receives 3 and the Column decider receives 1. If both people
choose B, the Row decider receives 1 and the Column decider receives 3. If the Row decider chooses A and the
Column decider chooses B, the Row decider receives 0 and the Column decider receives 0. If the Row decider
chooses B and the Column decider chooses A, the Row decider receives 0 and the Column decider receives 0. The
payment to the other people in the room is not affected by what the two people playing choose to do.
Each unit is worth $1 in actual money that will be paid in cash at the end of the experiment.
All people in the room (except for the person from the other room) will be able to watch the decider who belongs to
their room make his or her choice (however, no verbal comments are permitted).
The decision of the person who walks into the room, on the other hand, is made privately.
The outcome of the joint decision is immediately revealed to all people in the room.
After the 20 rounds are completed, we will total each person’s earnings and pay each person individually and
privately, using the numbers on your four cards to identify your decisions.
Please feel free to ask questions.
5
(Split audience)
INSTRUCTIONS (room R)
Thank you for participating in this experiment. You will receive $5 for your participation, in addition to other
money to be paid as a result of decisions made in the experiment.
There are 32 people participating in this session. They have been randomly divided into two rooms, each with 16
people. You are in room R, this means you are a member of the Row group.
Half of the people in this room will function as the audience and the other half of the people in this room will make
decisions. The people in the audience will remain in Room R, while the deciders will wait in another room until it is
time for their decisions.
There will be eight rounds in this session
, and each non-audience person will make two decisions, one in each room.
Such people will have a card with a green number and a card with a (different) yellow number. These numbers will
determine when and where they shall make decisions.
For the deciders:
The green number indicates the round during which it will be time to make a decision in the room where you are
now (room R).
The yellow number indicates the round during which it will be time to go to the other room (room C) and make a
decision there.
In each round there are two people making a decision in each room. Each person will be making a simultaneous
choice between A and B in the following decision matrix:
Column
A B
A 3 , 1 0 , 0
Row
B 0 , 0 1 , 3
In each cell, the first number represents the outcome for the decider Row and the second number represents the
outcome for the decider Column.
The other 15 members of each room also have a financial stake in the outcome – each person not making a decision
receives 1/3 of the amount shown for the realized outcome.
Thus, if both deciders choose A, the Row decider receives $3 and the Column decider receives $1; every non-
decider in the Row group receives $1 and every non-decider in the Column group receives $1/3. If both deciders
choose B, the Row decider receives $1 and the Column decider receives $3; every non-decider in the Row group
receives $1/3 and every non-decider in the Column group receives $1. If non-identical letters are chosen, everyone
receives 0. These are actual dollars that will be paid in cash.
Each person making a decision in the room will pass, face down, one of the decision cards to the experimenter, who
will reveal the choices when both cards have been passed. All people in the room will be able to observe the
outcome. However, no verbal comments are permitted at any time during the experiment.
After the eight rounds are completed, we will total each person’s earnings, add the $5 show-up fee, and pay each
person individually and privately, using the numbers on your two cards to identify your decisions. Audience
members receive an extra $1.
Please feel free to ask questions.
Citations
More filters
Journal Article•DOI•
Fighting alone versus fighting for a team: An experiment on multiple pairwise contests

[...]

Lingbo Huang1, Zahra Murad•
Nanjing Audit University1
01 Mar 2021-Journal of Economic Behavior and Organization
TL;DR: The authors examined how psychological motivations influence individual competitive behavior in response to a head start or a handicap when competing alone or competing for a team, and found that contestants' behavior in both individual and team contests exhibits a psychological momentum effect, whereby leaders fight harder than trailers.
Abstract: People who compete alone may entertain different psychological motivations from those who compete for a team. We examine how psychological motivations influence individual competitive behavior in response to a head start or a handicap when competing alone or competing for a team. We find that contestants’ behavior in both individual and team contests exhibits a psychological momentum effect, whereby leaders fight harder than trailers. However, the momentum effect is significantly larger in individual contests than in team contests and further disappears in team contests that are enriched with pre-play communication. The standard economic model, which predicts neither momentum effects nor treatment differences, fails to explain our findings. The findings can be better explained by a combination of two behavioral models: disappointment aversion and team spirit.

1 citations

Journal Article•DOI•
Harnessing the power of social incentives to curb shirking in teams

[...]

Brice Corgnet1, Brian C. Gunia2, Roberto Hernan Gonzalez•
EMLYON Business School1, Johns Hopkins University2
01 Feb 2021-Journal of Economics and Management Strategy
TL;DR: In this article, the authors studied several solutions to shirking in teams that trigger social incentives by reshaping the workplace social context using an experimental design, which manipulated social pressure at work by varying the type of workplace monitoring and the extent to which employees engage in social interaction.
Abstract: We study several solutions to shirking in teams that trigger social incentives by reshaping the workplace social context. Using an experimental design, we manipulate social pressure at work by varying the type of workplace monitoring and the extent to which employees engage in social interaction. This design allows us to assess the effectiveness as well as the popularity of each solution. Despite similar effectiveness in boosting productivity across solutions, only organizational systems involving social interaction (via chat) were at least as popular as a baseline treatment. This suggests that any solution based on promoting social interaction is more likely to be embraced by workers than monitoring systems alone.

1 citations

Journal Article•DOI•
Geographic distance, income and charitable giving: evidence from china

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Qian Weng1, Haoran He2•
Renmin University of China1, Beijing Normal University2
01 Dec 2019-The Singapore Economic Review
Abstract: Using data from a nationwide donation program and a follow-up survey, this paper examines how geographic distance between donors and recipients and the capability to give measured by donors’ income...

1 citations

Dissertation•DOI•
Essays in Experimental Labor Economics

[...]

Qiqi Wang1•
Iowa State University1
01 Jan 2013
TL;DR: Li et al. as discussed by the authors studied the role of self-confidence in the economic effects of diversity in the labor market and found that being self-confident is a channel to signal high productivity to employers.
Abstract: I use experimental methodology to study interactions in the labor market which are otherwise unobservable. In my experimental labor market, textquotedblleft workerstextquotedblright perform a real effort task by solving character puzzles. The worker first solves a single practice puzzle and then is paid to solve as many puzzles as possible in a 5-minute task period. I interpret the puzzles solved in the 5-minute task period as the worker's actual productivity, and the time to complete the single practice puzzle as a noisy signal of that productivity. Based on this noisy signal and other labor market characteristics such as ethnicity, gender, and urban/rural, "employers" are given incentives to estimate the productivity of workers.Compared to observational data, my experimental methodology has four key advantages. First, I precisely measure the workers' productivity through their ability to solve puzzles. This design eliminates the unobservable factors such as non-cognitive skills, which are likely to affect real labor market outcomes. Second, I build a direct link between the signal and the productivity using the uniform measure of puzzle-solving ability. Third, I explicitly measure the workers' self-confidence with a self-evaluation of their puzzle-solving ability. This measure allows me to study the role of self-confidence in the labor market. Finally, I can construct informative resumes for workers and observe how employers interpret this information when evaluating workers.In Chapter 1, "Diversity and Discrimination in Experimental Labor Markets," I use this experimental framework to study how stereotyping discrimination against ethnic minorities depends on the shares of ethnic groups in the population. To this purpose, I conduct the experiment with university students in two Chinese provinces: (1) a diverse province, where 60% of the population is Han Chinese; and (2) a non-diverse province, where 99% of the population is Han Chinese. The stereotype against ethnic minorities is measured by the employer's estimate of minority workers' productivity.I find that: (1) Han and minority workers are equally productive; (2) in the non-diverse province, Han employer productivity estimates are significantly lower for minority workers; (3) in the diverse population, a minority worker's productivity is equally estimated by Han and minority employers.This research furthers our understanding of the economic effects of diversity. It establishes a negative relationship between labor market stereotypes and diversity. Such findings may also provide an explanation for why the inflows of immigrant workers in some US states, like California, have continuously increased. My work suggests that the immigrant workers are looking for diverse communities with lower stereotypes in the labor market.In Chapter 2, "Self-confidence and Wage in Experimental Labor Markets," I study how signaling self-confidence to employers increases the worker's wage. Self-confidence is an example of a non-cognitive skill, that is likely to be important in the labor market. My experimental framework provides an explicit measure for self-confidence: the worker's evaluation of their own productivity.I find that for workers, being self-confident is a channel to signal high productivity to employers. Specifically, signaling 1% higher self-confidence to employers increases the employer estimate by 0.09%-0.21%, controlling for other labor market characteristics. The results establish the signaling value of self-confidence in wage negotiations, and highlight the importance of non-cognitive skills in the labor market.Chapter 3 proposes a methodology to measure the value of worker characteristics. In the design, employers buy worker characteristics in the Becker-DeGroot-Marschak (BDM) market. Specifically, employers claim a willingness to pay (WTP) for a characteristic. This characteristic is displayed on the resume if the WTP is higher than or equal to a randomly determined price. The value of a characteristic is measured by the magnitude of the WTP.This methodology can be applied in pricing discrimination. The common method to do so is an ex post approach, in which we study discrimination with a wage regression. In such regressions we measure the discriminatory wage differential of a characteristic, which is not related to the actual productivity, by looking at its coefficient in the regression. In our design, the discriminatory wage differential is measured by the WTP of a characteristic.Although Chapter 4 is not based on the experimental labor market, it serves as a complementary study to Chapter 1. To demonstrate how indirect contact can influence economic behavior, in this chapter, I study intergroup cooperation after observing in-group members interacting with out-group members.In the control treatment, a student is matched with someone from the other major in a two-player public goods game. In another treatment, the game players watch intergroup contact prior to the public goods game. The intergroup contact is defined by playing a jigsaw puzzle with someone from the other major. I find that relative to the control treatment, the contribution to the public goods after observing intergroup contact is significantly higher. To distinguish intergroup contact effect from simply putting subjects in a cooperative mood, the game players in a third treatment watch random contact. The results show that it is important to have in-group members in the contact.The results suggest that indirect contact can be applied when direct contact is restricted. When intergroup cooperation is desired, yet one or more groups are not available, we can select some members from each group and perform demonstrations on the rest. This is particularly useful for majority-minority intergroup cooperation, and for groups that are segregated in many dimensions. Indirect contact also implies financial freedom, as getting every group member involved in direct intergroup contact is very costly.To summarize, my dissertation contributes to the growing experimental labor market literature. Relative to data from the real labor markets, the experimental labor markets allow us to study otherwise unobservable interactions. With such experimental labor markets, I study the relationship between stereotyping discrimination in the labor market and diversity, the signaling value of self-confidence in wage negotiations, and an alternative methodology to price worker characteristics. In addition, I study the application of indirect contact in raising intergroup cooperation.

1 citations

Cites background from "Individual Behavior and Group Membe..."

  • ...al [25] argue that when an audience is present, a person’s behavior toward in-group members and outgroup members diverges further as the group affiliation to the audience increases....

    [...]

Endogenous Groups and Cooperation

[...]

Roy Chen
01 Jan 2011
TL;DR: The authors examine how endogenous group choice and intergroup comparison affect pro-social behavior in a laboratory setting, and calibrate a learning model incorporating social preferences, yielding estimates of the subjects' group-contingent other-regarding preferences.
Abstract: The endogenous choice of social groups is an important but underexplored aspect of social identity. While group membership is frequently voluntary in real-world situations, most studies of group effects limit their analysis to either pre-determined or induced/fixed groups. In this study, I separately examine how endogenous group choice and intergroup comparison affect pro-social behavior in a laboratory setting. Allowing subjects some choice over their group membership increases pro-social behavior, while intergroup comparison does so only when subjects care about their groups. Finally, I calibrate a learning model incorporating social preferences, yielding estimates of the subjects’ group-contingent other-regarding preferences. JEL: C91, D71

1 citations

References
More filters
An integrative theory of intergroup conflict

[...]

Henri Tajfel, John C. Turner1•
Australian National University1
01 Jan 2001

14,106 citations

Journal Article•DOI•
Rediscovering the social group: A self-categorization theory.

[...]

John C. Turner, Michael A. Hogg, Penelope J. Oakes, Stephen Reicher, Margaret Wetherell 
01 Jul 1989-Contemporary Sociology
TL;DR: In this paper, a self-categorization theory is proposed to discover the social group and the importance of social categories in the analysis of social influence, and the Salience of social Categories is discussed.
Abstract: 1. Introducing the Problem: Individual and Group 2. Rediscovering the Social Group 3. A Self-Categorization Theory 4. The Analysis of Social Influence 5. Social Identity 6. The Salience of Social Categories 7. Social Identity and Group Polarization 8. Crowd Behaviour as Social Action 9. Conclusion.

8,872 citations

Journal Article•DOI•
Africa's Growth Tragedy: Policies and Ethnic Divisions

[...]

William Easterly1, Ross Levine2•
World Bank1, University of Virginia2
01 Nov 1997-Quarterly Journal of Economics
TL;DR: This article showed that ethnic diversity helps explain cross-country differences in public policies and other economic indicators in Sub-Saharan Africa, and that high ethnic fragmentation explains a significant part of most of these characteristics.
Abstract: Explaining cross-country differences in growth rates requires not only an understanding of the link between growth and public policies, but also an understanding of why countries choose different public policies. This paper shows that ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure. Africa's high ethnic fragmentation explains a significant part of most of these characteristics.

5,648 citations

"Individual Behavior and Group Membe..." refers background in this paper

  • ...1 Some notable exceptions include Akerlof and Kranton (2000), Alesina et alii (2003), and Easterly and Levine (1997)....

    [...]

Book•
The Principles of Scientific Management

[...]

Frederick Winslow Taylor
01 Jan 1911
TL;DR: The Taylor System as discussed by the authors was developed as a system for increasing productivity in industry, and its principles have been applied to all kinds of large-scale enterprises, including operations with departments and agencies of the federal government.
Abstract: This brief essay by the founder of scientific management has served for nearly a century as a primer for administrators and for students of managerial techniques. Although scientific management was developed primarily as a system for increasing productivity in industry, its principles have been applied to all kinds of large-scale enterprises, including operations with departments and agencies of the federal government. It is in this volume that Frederick Winslow Taylor gave the theory of scientific management its clearest airing. Born in 1856, Taylor began work at age eighteen as an apprentice to a pattern-maker and as a machinist. A few years later he joined the Midvale Steel Company as a laborer, and in eight years rose to chief engineer. During this time he developed and tested what he called the "task system," which became known as the Taylor System and eventually as scientific management. He made careful experiments to determine the best way of performing each operation and the amount of time it required, analyzing the materials, tools, and work sequence, and establishing a clear division of labor between management and workers. His experiments laid the groundwork for the principles that are expounded in this essay, which was first published in 1911.

5,361 citations

Journal Article•DOI•
Economics and Identity

[...]

George A. Akerlof1, Rachel E. Kranton2•
University of California, Berkeley1, University of Maryland, College Park2
01 Aug 2000-Quarterly Journal of Economics
TL;DR: In this paper, the authors consider how identity, a person's sense of self, affects economic outcomes and incorporate the psychology and sociology of identity into an economic model of behavior, and construct a simple game-theoretic model showing how identity can affect individual interactions.
Abstract: This paper considers how identity, a person's sense of self, affects economic outcomes. We incorporate the psychology and sociology of identity into an economic model of behavior. In the utility function we propose, identity is associated with different social categories and how people in these categories should behave. We then construct a simple game-theoretic model showing how identity can affect individual interactions. The paper adapts these models to gender discrimination in the workplace, the economics of poverty and social exclusion, and the household division of labor. In each case, the inclusion of identity substantively changes conclusions of previous economic analysis.

4,825 citations

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Frequently Asked Questions (1)
Q1. What are the contributions in this paper?

In this paper, if both people choose A, the Row decider receives 5 and the Column deciders receives 5.