In-group and Out-group Biases in the Marketplace: A Field Experiment during the World Cup

Sang-Hyun Kim and Fernanda L. Lopez de Leon
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Fernanda L. Lopez de Leon: University of Kent

No 2016rwp-100, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: We investigate the effects of group identity on discrimination by conducting an audit study in electronics markets in Sao Paulo, Brazil during the 2014 Brazil World Cup (WC). To manipulate the visibility of buyers? group membership we made them wear shirts of national football teams, and exploit the outcomes of the WC matches, which arguably affected the salience of sellers?group identity. Although we ?nd that foreigners are overcharged, we do not detect discrimination against buyers wearing a rival team shirt. In contrast, we do detect in-group market favouritism (i.e., lower prices) towards buyers wearing the Brazil shirt when Brazil had won a match in the very recent past. Our analysis rejects the explanation that sellers?behaviour were always motivated by economic pro?ts. Instead, the results indicate taste-based discrimination (Becker, 1957) and shed light on the ways in which in-group and out-group biases occur in market outcomes.

Keywords: in-group and out-group discrimination; bargaining in the marketplace (search for similar items in EconPapers)
JEL-codes: C93 D71 J15 (search for similar items in EconPapers)
Pages: 38pages
Date: 2016-11
New Economics Papers: this item is included in nep-exp, nep-soc and nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: In-group and out-group biases in the marketplace: a field experiment during the World Cup (2019)
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