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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
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Abstract: We present a laboratory experiment that measures the effects of induced group identity on social preferences. We find that when participants are matched with an ingroup member, they show a 47 percent increase in charity concerns and a 93 percent decrease in envy. Likewise, participants are 19 percent more likely to reward an ingroup match for good behavior, but 13 percent less likely to punish an ingroup match for misbehavior. Furthermore, participants are significantly more likely to choose social-welfare-maximizing actions when matched with an ingroup member. All results are consistent with the hypothesis that participants are more altruistic toward an ingroup match. (

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Harvard University1, University of California, Los Angeles2
01 Dec 2015-Journal of Economic Literature
TL;DR: A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes as mentioned in this paper, focusing on one specific aspect of the relevance of culture: its relationship to institutions.
Abstract: A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions. ( JEL D02, D72, I32, J12, Z13)

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University of Queensland1
01 Jul 2008-Social Science Research Network
TL;DR: Experimenter demand effects refer to changes in behavior by experimental subjects due to cues about what constitutes appropriate behavior as discussed by the authors, and they can either be social or purely cognitive, and it crucially matters how they relate to the true experimental objectives.
Abstract: Experimenter demand effects refer to changes in behavior by experimental subjects due to cues about what constitutes appropriate behavior. We argue that they can either be social or purely cognitive, and that, when they may exist, it crucially matters how they relate to the true experimental objectives. They are usually a potential problem only when they are positively correlated with the true experimental objectives' predictions, and we identify techniques such as non-deceptive obfuscation to minimize this correlation. We discuss the persuasiveness or otherwise of defenses that can be used against demand effects criticisms when such correlation remains an issue.

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Large Stakes and Big Mistakes

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Duke University1, Carnegie Mellon University2, University of Toronto3
01 Apr 2009-The Review of Economic Studies
TL;DR: This article conducted a set of experiments in the U.S. and in India in which subjects worked on different tasks and received performance-contingent payments that varied in amount from small to very large relative to their typical levels of pay.
Abstract: Workers in a wide variety of jobs are paid based on performance, which is commonly seen as enhancing effort and productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can, in some cases, result in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments in the U.S. and in India in which subjects worked on different tasks and received performance-contingent payments that varied in amount from small to very large relative to their typical levels of pay. With some important exceptions, very high reward levels had a detrimental effect on performance.

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A Model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution

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Moses Shayo1•
Hebrew University of Jerusalem1
01 May 2009-American Political Science Review
TL;DR: In this article, the authors define social identification as a steady state where each individual's behavior is consistent with his or her social identity, social identities are consistent with the social environment, and the behavior of the individuals is determined by the individuals.
Abstract: rium (SIE) is a steady state where (1) each individual’s behavior is consistent with his or her social identity, (2) social identities are consistent with the social environment, and (3) the social environment is determined by the behavior of the individuals. Social identification is defined in terms of preferences: to identify with different groups means to have different preferences over outcomes. Preferences involve two novel components. The first is the status of the various groups that exist in society. Group status is the relative position of a group on valued dimensions of comparisons (e.g., wealth, occupational status, educationalachievement).Thus,ifweassumethatindividuals value consumption, then a group characterized by high levels of consumption will have a higher status than a group characterized by low levels, other things equal. The second component is the perceived similarity between an individual and the other members of the group. This component is modeled using the notion of distance in conceptual space from cognitive psychology. Each agent is characterized by a vector of attributes. The perceived distance from a given group is then simply a weighted Euclidean distance between the agent and the prototype of that group, with the weights reflecting the relative salience of the various

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References
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Journal Article•DOI•
Social categorization and intergroup behaviour

[...]

Henri Tajfel1, Michael Billig1, R. P. Bundy1, Claude Flament•
University of Bristol1
01 Apr 1971-European Journal of Social Psychology
TL;DR: In the second series of experiments, it was found that the maximum joint profit independent of group membership did not affect significantly the manner in which the subjects divided real pecuniary rewards; however, maximum profit for own group did affect the distribution of rewards; and the clearest effect on the subject's attempt to achieve a maximum difference between the ingroup and the outgroup even at the price of sacrificing other "objective" advantages.
Abstract: The aim of the studies was to assess the effefcs of social categorization on intergroup behaviour when, in the intergroup situation, neither calculations of individual interest nor previously existing attitudes of hostility could have been said to have determined discriminative behaviour against an outgroup. These conditions were satisfied in the experimental design. In the first series of experiments, it was found that the subjects favoured their own group in the distribution of real rewards and penalities in a situation in which nothing but the variable of fairly irrelevant classification distinguished between the ingroup and the outgroup. In the second series of experiments it was found that: 1) maximum joint profit independent of group membership did not affect significantly the manner in which the subjects divided real pecuniary rewards; 2) maximum profit for own group did affect the distribution of rewards; 3) the clearest effect on the distribution of rewards was due to the subjects' attempt to achieve a maximum difference between the ingroup and the outgroup even at the price of sacrificing other ‘objective’ advantages. The design and the results of the study are theoretically discussed within the framework of social norms and expectations and particularly in relation to a ‘generic’ norm of outgroup behaviour prevalent in some societies.

4,523 citations

Journal Article•DOI•
Principles of scientific management.

[...]

Walter F. Bodmer
01 Jun 1993-The FASEB Journal
TL;DR: Sir Walter Bodmer shares his perspective regarding the principles of successful scientific management from his experience in leading the Imperial Cancer Research Fund (ICRF) as well as his being in the forefront of science.
Abstract: coupled with general fiscal difficulties are hindering realization of knowledge and benefit to society. The solution requires more than the corporate mold of The increasing politicization of the support of science has awakened many a scientist to the risks and realities of survival as an investigator and to the threats to the future of science. Effective management and wise leadership of the scientific enterprise are necessary solutions to the dilemma. Sir Walter Bodmer shares his perspective regarding the principles of successful scientific management from his experience in leading the Imperial Cancer Research Fund (ICRF) as well as his being in the forefront of science. Yes! Management is necessary. But to be effective it must not displace leadership or the recognition and pursuit of excellence. It must be nonintrusive. Naive management imperatives in management. It must encompass a variety of actions based in the fundamental principle that management supports the optimal conduct of science. Dr. Bodmer guides us through these principles with clarity, experience, and vision. The principles of excellence, balance, and strategic insight have each been key ingredients in the success of the ICRF and are applicable at large.

4,074 citations

Book•
Collapse: How Societies Choose to Fail or Succeed

[...]

Jared M. Diamond
01 Jan 2005
TL;DR: In this paper, the authors examine the circumstances that allowed Western civilizations to dominate much of the world and what can we learn from their fates using a vast historical and geographical perspective ranging from Easter Island and the Maya to Viking Greenland and modern Montana.
Abstract: In his runaway bestseller Guns, Germs, and Steel, Jared Diamond brilliantly examined the circumstances that allowed Western civilizations to dominate much of the world. Now he probes the other side of the equation: What caused some of the great civilizations of the past to fall into ruin, and what can we learn from their fates? Using a vast historical and geographical perspective ranging from Easter Island and the Maya to Viking Greenland and modern Montana, Diamond traces a fundamental pattern of environmental catastrophe - one whose warning signs can be seen in our modern world and that we ignore at our peril. Blending the most recent scientific advances into a narrative that is impossible to put down, Collapse exposes the deepest mysteries of the past even as it offers hope for the future.

3,454 citations

Journal Article•DOI•
In-group bias in the minimal intergroup situation: A cognitive-motivational analysis.

[...]

Marilynn B. Brewer
01 Jan 1979-Psychological Bulletin
TL;DR: In this paper, a review of the research on intergroup discrimination in favor of one's own group is reviewed in terms of the basis of differentiati on between in-group and out-group, and the response measure on which ingroup bias is assessed.
Abstract: Experimental research on intergroup discrimination in favor of one's own group is reviewed in terms of the basis of differentiati on between in-group and outgroup and in terms of the response measure on which in-group bias is assessed. Results of the research reviewed suggest that (a) factors such as intergroup competition, similarity, and status differentials affect in-group bias indirectly by influencing the salience of distinctions between in-group and out-group, (b) the degree of intergroup differentiation on a particular response dimension is a joint function of the relevance of intergroup distinctions and the favorableness of the in-group's position on that dimension, and (c) the enhancement of in-group bias is more related to increased favoritism toward in-group members than to increased hostility toward out-group members. The implications of these results for positive applications of group identification are discussed. In 1906, sociologist William Sumner articulated a functionalist approach to the nature of intergroup attitudes in his exposition of the concept of ethnocentrism . The differentiation of peoples into distinct ethnic groups originates, according to Sumner, in context of the "conditions of the struggle for existence." At the individual level, the psychological consequences of this differentiation both reflect and sustain the basic state of conflict between the in-group (or "we-group") and out-groups (or "others-groups"):

3,172 citations

Book•
Is inequality harmful for growth

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Torsten Persson, Guido Tabellini
01 Jan 1994
TL;DR: In this article, a theoretical model for the relationship between inequality and economic growth is proposed, and the model implications are supported by the evidence that both historical panel data and post-war cross-sectional data indicate a significant and large negative relation between inequalities and growth.
Abstract: Is inequality harmful for growth? We suggest that it is. In a society where distributional conflict is important, political decisions produce economic policies that tax investment and growth promoting activities in order to redistribute income. The paper formulates a theoretical model that captures this idea. The model implications are supported by the evidence. Both historical panel data and post-war cross sectionc indicate a significant and large negative relation between inequality and growth. This relation is only present in democracies.

3,170 citations

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

  • ...The literature develops earlier ideas that inequality and social conflict may have negative influence on growth (Persson and Tabellini, 1994; Benhabib and Rustichini, 1996)....

    [...]

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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.