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Favoring your in-group can harm both them and you: Ethnicity and public goods provision in China

César Mantilla (), Ling Zhou, Charlotte Wang (), Donghui Yang, Suping Shen and Paul Seabright

Journal of Economic Behavior & Organization, 2021, vol. 185, issue C, 211-233

Abstract: Do people discriminate between co-ethnics and others in cooperative interactions? In an experiment in China, we find that participants in trust games send around 15% more to partners they know to be co-ethnics than to those whose ethnicity they do not know. Receivers’ behavior is determined by amounts received and not by perceived ethnicity. In line with previous literature we find that subjects contribute more to public goods in ethnically homogeneous groups than in mixed groups. We find evidence for a new explanation that is not due to different intrinsic preferences for cooperation with ingroup and outgroup members. Instead, subjects’ willingness to punish in-group members for free-riding is reduced when out-group members are present. This leads to lower contributions and net earnings in mixed groups. Thus favoritism towards co-ethnics can hurt both those engaging in favoritism and those being favored.

Keywords: Ethnic cooperation; Lab-in-the-field; Trust; Reciprocity; Punishment (search for similar items in EconPapers)
JEL-codes: C93 D9 H41 (search for similar items in EconPapers)
Date: 2021
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Working Paper: Favoring your in-group can harm both them and you: Ethnicity and public goods provision in China (2021)
Working Paper: Favoring Your In-Group Can Harm Both Them and You: Ethnicity and Public Goods Provision in China (2018) Downloads
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DOI: 10.1016/j.jebo.2021.02.016

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