Discrimination, Social Identity, and Coordination: An Experiment
Games and Economic Behaviour, Vol. 107, January 2018, pp. 238-252

This paper presents an experiment investigating whether decision makers discriminate between members of their own group and members of another group. I focus on two aspects of this question: First, I compare behavior in individual and in joint decisions; Second, I test whether the identity of the co-decision maker matters in joint decisions. Substantial own group favoritism occurs in joint decisions in spite of there being no such favoritism in individual decisions. Decision makers strongly favor own group candidates when deciding with someone from their own group, but not when deciding with someone from the other group. The study suggests that higher-order beliefs about co-decision maker behavior may be a factor behind discrimination in collective settings and that diversity in committees might be helpful in counteracting own group favoritism.

Categorization and Coordination
(with N. J. Vriend)

This paper considers the use of categories to make predictions. It presents a framework to examine when decision makers may be better off using fewer rather than more categories, even without exogenous costs of using more. We study three cases: individual prediction, coordination of predictions, and the convex combination of the two. The analysis focuses on how the attempt to coordinate predictions with others affects incentives for coarse categorization in different environments. We show that while a coordination motive does not provide incentives for coarse categorization in deterministic environments, it could provide such incentives in stochastic environments.

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earlier version appeared as Cambridge-INET Working Paper 2014/11

Learning Categorizations of Strategy Spaces
(with N. J. Vriend)

In many strategic situations some attribute(s) can serve to distinguish different categories of strategies. There may be many different ways to categorize a player's strategies in a given game. We present a model in which agents learn which internal representation of the strategy space to use. We show how this model can be used to fit existing experimental data on human behaviour, as well as to make predictions of behavior in a game for which we have no multi-period data. Our analysis of the model dynamics gives insights into the costs and benefits of using coarse versus fine internal representations of the strategy space and shows that one needs a balance between having a coarse categorization and a fine category within that categorization when it comes to learning.

revised version coming soon

Social Identity and Punishment in a Minimum Effort Game
(with M. Drouvelis and N. J. Vriend)

We study the impact of social identity and punishment in a Minimum Effort Game (MEG) experiment. In a first stage, subjects participated in some problem solving tasks, either as a group or individually. In a second stage, subjects played a one-shot two-player MEG, either with an In-group or an Out-group counterpart, or as individuals without group identity. The MEG in this second stage was either with or without a punishment mechanism. In the treatments with punishment, subjects were given the opportunity to assign costly punishment points to their counterpart conditional on the effort levels chosen by their counterpart. We develop a measure of the strength of group identity based on consensus in the problem solving tasks. We find that the presence of group identity leads to higher effort levels. The threat of punishment leads to higher effort levels in the Out-group treatment. There is no difference in punishment schedules towards In- and Out-group members.

Signalling Social Identity
(with M. Drouvelis and N. J. Vriend)

This experiment focuses on two questions: First, are individuals willing to incur a cost to signal their true (or false) group identity to a person they are matched to interact with? Second, we test whether a true (or false) identity signal can help players to coordinate on a more socially efficient outcome in subsequent play of a coordination game involving a risk-return trade-off. We find that a significant proportion of subjects care about their group identity or believe that it matters enough to send a costly signal to others. Effort levels in the out-group treatment increase significantly when participants are allowed to lie about their group identity compared to the case when they are not allowed to lie.