Scandinavian Working Papers in Economics

SITE Working Paper Series,
Stockholm School of Economics, Stockholm Institute of Transition Economics

No 24: On the Effects of Group Identity in Strategic Environments

Chloe Le Coq (), James Tremewan () and Alexander K. Wagner ()
Additional contact information
Chloe Le Coq: Stockholm Institute of Transition Economics, Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
James Tremewan: Department of Economics, University of Vienna (Austria), Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Alexander K. Wagner: Department of Economics, University of Cologne (Germany), Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: 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 a player's social preferences, as identified in earlier research, but also affects the decision making process, independent of changes in the utility function.

Keywords: Group identity; centipede game; steg hunt game; experiment

JEL-codes: C72; C91; C92; D83

34 pages, First version: September 30, 2013. Revised: October 10, 2014. Earlier revisions: September 9, 2014.

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