The Potential of Social Identity for Equilibrium Selection
01 Oct 2011-The American Economic Review (American Economic Association)-Vol. 101, Iss: 6, pp 2562-2589
TL;DR: In this paper, a group-contingent social preference model was proposed and conditions under which social identity changes equilibrium selection for minimum-effort game in the laboratory under parameter configura tions, which lead to an inefficient loweffort equilibrium for subjects with no group identity.
Abstract: When does a common group identity improve efficiency in coordina tion games? To answer this question, we propose a group-contingent social preference model and derive conditions under which social identity changes equilibrium selection. We test our predictions in the minimum-effort game in the laboratory under parameter configura tions which lead to an inefficient low-effort equilibrium for subjects with no group identity. For those with a salient group identity, con sistent with our theory, we find that learning leads to ingroup coor dination to the efficient high-effort equilibrium. Additionally, our theoretical framework reconciles findings from a number of coordi nation game experiments. (JEL C71, C91, D71) Today's workplace comprises increasingly diverse social categories, including various racial, ethnic, religious, and linguistic groups. Within this environment, many organizations face competition among employees in different departments, as well as conflicts between permanent employees and contingent workers (tem porary, part-time, seasonal, and contracted employees). While a diverse work force contains a variety of abilities, experiences, and cultures which can lead to innovation and creativity, diversity may also be costly and counterproductive if members of work teams find it difficult to integrate their diverse backgrounds and work together (Shaun P. Hargreaves Heap and Daniel J. Zizzo 2009). This issue of integrating and motivating a diverse work force is thus an important consider ation for organizations. One method to achieve such integration is to develop a common identity. In practice, common identities have often been used to create common goals and values. To create a common identity and to teach individuals to work together toward a common purpose, companies have attempted various creative team-building exercises, such as simulated space missions where the crew works together to overcome malfunctions, perform research, and keep life sup port systems operational while navigating through space (J. R. Ball 1999), and
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TL;DR: This article developed an extension of the theory that connects bias explicitly to coefficient stability and showed that it is necessary to take into account coefficient and R-squared movements, and showed two validation exercises and discuss application to the economics literature.
Abstract: A common approach to evaluating robustness to omitted variable bias is to observe coefficient movements after inclusion of controls. This is informative only if selection on observables is informative about selection on unobservables. Although this link is known in theory in existing literature, very few empirical articles approach this formally. I develop an extension of the theory that connects bias explicitly to coefficient stability. I show that it is necessary to take into account coefficient and R-squared movements. I develop a formal bounding argument. I show two validation exercises and discuss application to the economics literature. Supplementary materials for this article are available online.
2,115 citations
TL;DR: This paper found that participants are significantly more likely to choose social welfare-maximizing actions when matched with an ingroup member when compared to when they are matched with a non-group identity.
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. (
1,360 citations
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)
977 citations
18 Nov 2013
TL;DR: The book describes experiments in Strategic Interaction using game theory as a guide to solving social problems.
Abstract: หนงสอ Behavioral Game Theory: Experiments in Strategic Interaction เขยนโดย Colin F. Camerer มวตถประสงคเพอนำเสนอหลกฐานเชงประจกษจากผลการวจยจำนวนมากมายทยนยนอทธพลของปจจยทางจตวทยาทมผลตอการตดสนใจตามทฤษฎเกม หนงสอ เลมนไดนำเสนอแนวคดทฤษฎทเพมความสามารถในการอธบายพฤตกรรมการตดสนใจตามทฤษฎเกม (Game theory) ซง von Neumann; & Morgenstern ไดเสนอไวในป ค.ศ. 1944 โดยชใหเหนวา ปจจยทางจตวทยามอทธพลทำใหการตดสนใจทเกดขนจรงคลาดเคลอนจากการคาดการณของทฤษฎเกม
903 citations
TL;DR: To contribute data about replicability in economics, 18 studies published in the American Economic Review and the Quarterly Journal of Economics between 2011 and 2014 are replicated, finding that two-thirds of the 18 studies examined yielded replicable estimates of effect size and direction.
Abstract: The replicability of some scientific findings has recently been called into question. To contribute data about replicability in economics, we replicated 18 studies published in the American Economic Review and the Quarterly Journal of Economics between 2011 and 2014. All of these replications followed predefined analysis plans that were made publicly available beforehand, and they all have a statistical power of at least 90% to detect the original effect size at the 5% significance level. We found a significant effect in the same direction as in the original study for 11 replications (61%); on average, the replicated effect size is 66% of the original. The replicability rate varies between 67% and 78% for four additional replicability indicators, including a prediction market measure of peer beliefs.
811 citations
References
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01 Jan 1980
TL;DR: History Conceptual Foundations Uses and Kinds of Inference The Logic of Content Analysis Designs Unitizing Sampling Recording Data Languages Constructs for Inference Analytical Techniques The Use of Computers Reliability Validity A Practical Guide
Abstract: History Conceptual Foundations Uses and Kinds of Inference The Logic of Content Analysis Designs Unitizing Sampling Recording Data Languages Constructs for Inference Analytical Techniques The Use of Computers Reliability Validity A Practical Guide
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09 Jan 2004
TL;DR: A theory of intergroup conflict and some preliminary data relating to the theory is presented in this article. But the analysis is limited to the case where the salient dimensions of the intergroup differentiation are those involving scarce resources.
Abstract: This chapter presents an outline of a theory of intergroup conflict and some preliminary data relating to the theory. Much of the work on the social psychology of intergroup relations has focused on patterns of individual prejudices and discrimination and on the motivational sequences of interpersonal interaction. The intensity of explicit intergroup conflicts of interests is closely related in human cultures to the degree of opprobrium attached to the notion of "renegade" or "traitor." The basic and highly reliable finding is that the trivial, ad hoc intergroup categorization leads to in-group favoritism and discrimination against the out-group. Many orthodox definitions of "social groups" are unduly restrictive when applied to the context of intergroup relations. The equation of social competition and intergroup conflict rests on the assumptions concerning an "ideal type" of social stratification in which the salient dimensions of intergroup differentiation are those involving scarce resources.
14,812 citations
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TL;DR: This paper showed that if some people care about equity, the puzzles can be resolved and that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior in cooperative games.
Abstract: There is strong evidence that people exploit their bargaining power in competitivemarkets butnot inbilateral bargainingsituations. Thereisalsostrong evidence that people exploit free-riding opportunities in voluntary cooperation games. Yet, when they are given the opportunity to punish free riders, stable cooperation is maintained, although punishment is costly for those who punish. This paper asks whether there is a simple common principle that can explain this puzzling evidence. We show that if some people care about equity the puzzles can be resolved. It turns out that the economic environment determines whether the fair types or the selesh types dominate equilibrium behavior.
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TL;DR: This article showed that if a fraction of the people exhibit inequality aversion, stable cooperation is maintained although punishment is costly for those who punish, and they also showed that when they are given the opportunity to punish free riders, stable cooperations are maintained.
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