Group Identity and Relation-Specific Investment: An Experimental Investigation

Hodaka Morita () and Maroš Servátka

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: The hold-up problem has played a central role in the study of firm boundaries, which is a fundamental element of the economic study of organizations. We study a previously unex-plored mechanism by which integration between two parties could resolve the problem. Based on the social identity theory, we conjecture that group identity strengthens agents’ altruistic prefer-ences towards group members, and this helps resolve the hold-up problem. We test this conjec-ture in a laboratory experiment. Our subjects were randomly divided into two teams and asked to wear their team uniform. Task 1 required them to answer questions about trivia, where the sub-jects had access to a chat program that enabled them to help their team members. For Task 2, the subjects played a hold-up game with either a member of their own team (representing integra-tion) or a member of the other team (non-integration). The experimental results support our conjectures.

Keywords: altruism; experiment; hold-up problem; group identity; integration; other-regarding preferences; relation-specific investment; team membership (search for similar items in EconPapers)
JEL-codes: C91 D20 L20 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-11-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://repec.canterbury.ac.nz/cbt/econwp/1216.pdf (application/pdf)

Related works:
Journal Article: Group identity and relation-specific investment: An experimental investigation (2013)
Working Paper: Group Identity and Relation-Specific Investment: An Experimental Investigation (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:12/16

Access Statistics for this paper

More papers in Working Papers in Economics from University of Canterbury, Department of Economics and Finance Private Bag 4800, Christchurch, New Zealand. Contact information at EDIRC.
Bibliographic data for series maintained by Albert Yee ().