Identity , Groups , and Social Preferences

This paper presents a novel experiment on identity and individual social preferences. Using a within subject design and new empirical methods, we find more than twenty percent of subjects destroy total income – at personal cost – to earn more than subjects outside their group. Minimal groups divide subjects according to arbitrary criteria, and political groups divide subjects according to party affiliations and opinions. In both treatments, Democrats behave more selfishly and destructively towards out-group members. Independents do so only in political groups, though less strongly. Thus group divisions are salient for some people but not others, depending on individual differences and identities. * Contacts: [email protected], [email protected], [email protected], [email protected]. Authors are listed in alphabetical order following the convention in economics, except for the lab director who is listed last following the convention in psychology & neuroscience. We are grateful to George Akerlof, Jeff Butler, John Miller, Pedro Rey-Biel and seminar and conference participants at Berkeley, Conference on the Economics of Interactions & Culture (EIEF), Duke, Ecole Polytechnique, Erasmus Choice Symposium, Pompeu Fabra, Institute for Economic Analysis & Universitat Autònama de Barcelona, Maryland, Paris School of Economics, and Washington University for their comments. We thank the Social Science Research Institute at Duke for sponsoring our faculty fellows program in 2010-2011, “From Brain to Society (and Back),” and we are grateful for funding from the Transdisciplinary Prevention Research Center (TPRC) at Duke, as supported by the National Institute on Drug Abuse grant DA023026. 2