Identity,homophily and in-group bias |
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| Institution: | 1. University of Leicester, United Kingdom;2. New Economic School, Moscow, Russia;3. Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, United Kingdom;4. Department of Economics (AE1), Maastricht University, PO Box 616, 6200 MD Maastricht, The Netherlands;1. Olin School of Business, Washington University in St. Louis, United States;2. Division of the Humanities and Social Sciences, Caltech, United States;1. University of Exeter, United Kingdom;2. Hong Kong Polytechnic University, China;3. Center for Studies in the Social Sciences, Calcutta, India;1. Department of Economics, Weber State University, Ogden, UT, United States;2. Department of Economics, George Mason University, Fairfax, VA, United States;1. School of Information, University of Michigan, 105 S. State Street, Ann Arbor, MI 48109, United States;2. School of Economic, Political and Policy Sciences, University of Texas at Dallas, 800 W. Campbell Road, Richardson, TX 75080, United States;3. Department of Economics, Tsinghua University, Beijing, China;4. UCLA Anderson School of Management, University of California at Los Angeles, 110 Westwood Plaza, Los Angeles, CA 90095-1481, United States;1. School of Economics, Centre for Behavioural and Experimental Social Science, and Centre for Competition Policy, University of East Anglia, Norwich NR4 7TJ, UK;2. School of Economics, and Centre for Behavioural and Experimental Social Science, University of East Anglia, Norwich NR4 7TJ, UK;1. School of Economics, University of Nottingham, Nottingham NG7 2RD, UK;2. Department of Economics, Ben-Gurion University of the Negev, P.O.B. 653, Beer-Sheva 84105, Israel |
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| Abstract: | Many instances of social interaction display either or both of the following well-documented phenomena. People tend to interact with similar others (homophily). They also tend to treat others of shared social identity more favorably (in-group bias). While both phenomena involve some degree of discrimination towards others, a systematic study of their relations and interplay is yet missing. In this paper we report the findings of an experiment designed to address this issue. Participants are exogenously and randomly assigned to one of two groups. Subsequently they play a sequence of eight games with either an in-group or an out-group member. In treatment EXO in- and out-group matches are formed exogenously, while in ENDO participants can choose between in- and out-group matches. We find strong evidence of in-group bias in EXO, and strong evidence of homophily in ENDO. In-group biases, however, either decrease or disappear altogether under endogenous matching. We show that self-selection of homophilous agents into in-group matches cannot explain this fact. We also find that homophily is strongly correlated with risk aversion, and we build on this evidence to derive a rationale for both the existence of homophily and the disappearance of in-group biases under endogenous matching. |
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| Keywords: | In-group bias Homophily Endogenous matching Experiments Discrimination |
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