The effects of group composition in a strategic environment: Evidence from a field experiment

John List, William Neilson and Michael Price

European Economic Review, 2016, vol. 90, issue C, 67-85

Abstract: Recent theoretical and empirical studies have explored the effect of group membership and identity on individual decision-making. This line of research highlights that economic models focusing on the individual as the sole entity in the decision-making environment potentially miss critical features. This study takes this literature in a new direction by overlaying a field experiment onto a setting where groups have arisen naturally. Our experimental laboratory is large open air markets, where we are able to examine the effects of group membership on seller׳s collusive behavior as measured by prices and surplus allocations. This permits us to explore strategic implications of group composition. Empirical results illustrate the importance of group composition on pricing decisions, and show that deviations from Nash equilibrium are crucially related to group membership.

Keywords: Field experiments; Group identity; Cooperation (search for similar items in EconPapers)
JEL-codes: C93 D03 Z13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Working Paper: The effects of group composition in a strategic environment: Evidence from a field experiment (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:90:y:2016:i:c:p:67-85

DOI: 10.1016/j.euroecorev.2016.02.019

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