Group Identity and Social Preferences

In our study, the stage of other-other allocations had five rounds. From round 1 to round 5, thetotal number of tokens to be allocated increased from 200 to 400 with an increment of 50 tokensin each round. We used the strategy method to elicit participant strategy profiles. 7 During eachround, everyone decided how to allocate tokens between another two people under three scenarios,if both of them came from her own group, if both came from the other group, and if one came fromher own group and the other from a different group. It was public information that only one roundof their decisions would be randomly selected by the computer to compute payoffs. At the endof the second stage, a random sequence of ID numbers was generated by the computer to decidewho allocated tokens to whom. Everyone allocated tokens between the two participants whose IDsdirectly followed hers in the sequence. Therefore, one’s payoff in this stage was the sum of thetokens allocated to her by the two people whose IDs preceded hers in the random sequence.While the first two stages are designed to induce and enhance group identity, we use the thirdstage to investigate the impact of group identity on social preferences and economic outcomes.In the third stage, subjects made decisions in a series of two-person sequential move games selectedfrom Charness and Rabin (2002) 8 as well as an extension of some of the games. AppendixA presents a description of the set of games as well as the summary statistics for each game.Specifically, we selected five two-person dictator games and sixteen two-person response games.Furthermore, to investigate the sensitivity of Player B’s response to the cost in self-benefit, weadded three games that were based on Berk31 (Charness and Rabin 2002) with a varied amountfor Player B payoff.The two-person response games fall into three categories. For games in the first category, Bincurs no cost to help or punish A. For games in the second category, B needs to sacrifice herown self-interest to help A. For games in the third category, B incurs a cost if she penalizes A.Subjects made decisions in seven to ten games in each session. For each game, each participantwas randomly matched with another participant and they were randomly assigned roles A or B. Nofeedback was given until the end of the experiment. This procedure is similar to that in Charnessand Rabin (2002). In our design, we use the strategy method to solicit participant decisions undertwo scenarios: if the participant’s match is from the same group, and if her match is from the othergroup. At the end of the experiment, two of the games were randomly selected by the computer tocompute the payoffs, as announced in the instructions. Experimental instructions are included inAppendix B.The post-experiment survey contains questions about demographics, past giving behavior,strategies used during the experiment, group affiliation, and prior knowledge about the artists andpaintings. The survey and response statistics are included in Appendix C.[Table 1 about here.]Table 1 reports the features of experimental sessions, including Session Number, Treatment orControl, Game Set, Number of Subjects per Session, and Number of Subjects used in the analysis.Overall, 24 independent computerized sessions were conducted in the RCGD lab at the Universityof Michigan from January to July 2005, yielding a total of 374 subjects. We used z-Tree(Fischbacher 1999) to program our experiments. Most of our subjects were students from the7 See Charness and Rabin (2005) for a discussion of the use of strategy methods in experimental games.8 We thank Gary Charness for helping us select the games.7