Scandinavian Working Papers in Economics

CAFO Working Papers,
Linnaeus University, Centre for Labour Market Policy Research (CAFO), School of Business and Economics

No 2006:11: Group Identity, Intergroup Bias, and Discrimination

Ali M. Ahmed ()
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Ali M. Ahmed: Centre for Labour Market Policy Research (CAFO), Postal: Centre for Labour Market Policy Research (CAFO), Dept of Economics and Statistics, School of Management and Economics, Växjö University , SE 351 95 Växjö, Sweden

Abstract: This paper studies how group a±liation and intergroup bias may affect economic decision- making. Two types of experimental groupings are created and subjects are then paired with either an in-group member or an out-group member in a number of two-person games. The result of this experiment shows that out-group members face a risk of being discriminated against. The cause of the discrimination is not hostility toward out-group members; discrimination is triggered because of higher expectations or favoritism of in-group members. This type of behavior holds regardless of the grouping procedure.

Keywords: Discrimination; Intergroup bias; Group identity; Experiment

JEL-codes: C90; J70

25 pages, October 8, 2006

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