Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market

David Dickinson, David Masclet () and Emmanuel Peterle ()

European Economic Review, 2018, vol. 104, issue C, 220-236

Abstract: We examine both the private benefits and spillover costs of labor market favoritism in a unique laboratory experiment design. Our data show that both employment preference and wage offers favor in-group members. Workers positively reciprocate towards in-group employers by choosing higher effort in a gift-exchange game. Thus, favoritism can be privately rational for employers. However, unemployed subjects are allowed to burn resources (at a cost to themselves), and we document significantly increased resource destruction when unemployment can be attributed to favoritism towards others. This highlights a significant spillover and often ignored cost of favoritism, and it points to one possible micro-foundation of some antisocial behavior.

Keywords: Discrimination; Experimental economics; Social identity; Conflict (search for similar items in EconPapers)
JEL-codes: C90 C92 J15 J16 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2018)
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2018)
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2018)
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2017)
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2017)
Working Paper: Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market (2017)
Working Paper: Discrimination as Favoritism: The Private Benefits and Social Costs of In-group Favoritism in an Experimental Labor Market (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:104:y:2018:i:c:p:220-236

DOI: 10.1016/j.euroecorev.2018.03.004

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