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Group Identity and Discrimination in Small Markets: Asymmetry of In-Group Favors

Gerhard Riener and Alexander Schacht ()
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Alexander Schacht: Graduate College "The Economics of Innovative Change", Friedrich Schiller University, Jena

No 2011-043, Jena Economic Research Papers from Friedrich-Schiller-University Jena

Abstract: We experimentally study the inuence of induced group identity on the determination of prices and beliefs in a small market game. We create group identity through a focal point coordination game. Subjects play a three-person bargaining game where one seller can sell an indivisible good to one of two competing buyers under four different treatments varying the buyer-seller constellation. We find evidence of in group favoritism on the buyer side. However we do not detect a lower ask prices for in-group sellers for in-group buyers, indicating that in-group favoritism is in favor of the more powerful market participant.

Keywords: Group identity; Experiments; Markets; Bargaining (search for similar items in EconPapers)
JEL-codes: C91 D45 L13 L14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp and nep-gth
Date: 2011-10-07
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