On the effects of group identity in strategic environments

We examine differences in behavior between subjects interacting with a member of either the same or different identity group in both a centipede game and a series of stag hunt games. We find evidence that subjects interacting with outgroup members are more likely to behave as though best-responding to uniform randomization of the partner. We conclude that group identity not only affects player׳s social preferences, as identified in earlier research, but also affects the decision making process, independent of changes in the utility function.