The effect of social fragmentation on public good provision : an experimental study

We study the role of social identity in determining the impact of social fragmentation on public good provision using laboratory experiments. We find that as long as there is some degree of social fragmentation, increasing it leads to lower public good provision by majority group members. This is mainly because the share of those in the majority group who contribute fully to the public good diminishes with social fragmentation, while the share of free-riders is unchanged. This suggests social identity preferences drive our result, as opposed to self-interest. Importantly, we find no difference in contribution between homogeneous and maximally-fragmented treatments, reinforcing our finding that majority groups contribute most in the presence of some diversity.

[1]  D. Campbell,et al.  Ethnocentrism: theories of conflict, ethnic attitudes, and group behavior , 1973 .

[2]  Gary S. Becker,et al.  The Economics of Discrimination. , 1972 .

[3]  Herbert Gintis,et al.  Persistent parochialism: trust and exclusion in ethnic networks , 2004 .

[4]  Sergio Currarini,et al.  Identity, Homophily and In-Group Bias , 2012 .

[5]  E. Fehr,et al.  Tastes, Castes, and Culture: The Influence of Society on Preferences , 2011, SSRN Electronic Journal.

[6]  Erzo F. P. Luttmer.  Group Loyalty and the Taste for Redistribution , 2001, Journal of Political Economy.

[7]  F. Galeotti,et al.  Trust and trustworthiness with singleton groups , 2012 .

[8]  M. Brewer,et al.  Effects of group identity on resource use in a simulated commons dilemma. , 1984, Journal of personality and social psychology.

[9]  D. Cremer,et al.  Psychology in organizations: The social identity approach , 2001 .

[10]  Abhijit Banerjee,et al.  History, Social Divisions, and Public Goods in Rural India , 2005 .

[11]  Klaus M. Schmidt,et al.  A Theory of Fairness, Competition, and Cooperation , 1999 .

[12]  Robert J. Oxoby,et al.  Identity, Cooperation, and Punishment , 2007, SSRN Electronic Journal.

[13]  H. Tajfel,et al.  An integrative theory of intergroup conflict. , 1979 .

[14]  Catherine C. Eckel,et al.  Managing Diversity by Creating Team Identity , 2005 .

[15]  Dean S. Karlan,et al.  Social Connections and Group Banking , 2005 .

[16]  G. Āllport.  The Nature of Prejudice , 1954 .

[17]  Siwan Anderson.  Caste as an Impediment to Trade , 2011 .

[18]  K. Zimmermann,et al.  Measuring Ethnic Identity and its Impact on Economic Behaviour , 2007 .

[19]  Alexander Smith,et al.  Group composition and conditional cooperation , 2011 .

[20]  D. Nosenzo,et al.  Group identity and leading-by-example , 2013 .

[21]  Richard Cookson,et al.  Framing Effects in Public Goods Experiments , 2000 .

[22]  M. Jackson,et al.  An Economic Model of Friendship: Homophily, Minorities and Segregation , 2007 .

[23]  M. Sherif,et al.  Groups in harmony and tension : an integration of studies on intergroup relations , 1954 .

[24]  H. Tajfel,et al.  Aspects of national and ethnic loyalty , 1970 .

[25]  Yan Chen,et al.  The Potential of Social Identity for Equilibrium Selection , 2011 .

[26]  J. Brown-Kruse,et al.  Gender effects in laboratory public goods contribution: Do individuals put their money where their mouth is? , 1993 .

[27]  M. Brewer.  In-group bias in the minimal intergroup situation: A cognitive-motivational analysis. , 1979 .

[28]  J. Kagel,et al.  Handbook of Experimental Economics , 1997 .

[29]  M. Brewer.  The Psychology of Prejudice: Ingroup Love and Outgroup Hate? , 1999 .

[30]  Charles M. Tiebout.  A Pure Theory of Local Expenditures , 1956, Journal of Political Economy.

[31]  M. Rabin,et al.  Understanding Social Preference with Simple Tests , 2001 .

[32]  George A. Akerlof,et al.  Economics and Identity , 2000 .

[33]  Arjaan Wit,et al.  The effect of social categorization on cooperation in three types of social dilemmas. , 1992 .

[34]  E. Ferrara,et al.  Kin Groups and Reciprocity: A Model of Credit Transactions in Ghana , 2003 .

[35]  S. Meier,et al.  The Impact of Group Membership on Cooperation and Norm Enforcement: Evidence Using Random Assignment to Real Social Groups , 2006, SSRN Electronic Journal.

[36]  A. Alesina,et al.  Public Goods and Ethnic Divisions , 1997 .

[37]  U. Fischbacher.  z-Tree: Zurich toolbox for ready-made economic experiments , 1999 .

[38]  Andrei Shleifer,et al.  The Quality of Goverment , 1998 .

[39]  A. Khwaja,et al.  Can good projects succeed in bad communities , 2009 .

[40]  Moses Shayo.  A Model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution , 2009, American Political Science Review.

[41]  P. McLeod,et al.  Effects of Ethnic Group Cultural Differences on Cooperative and Competitive Behavior On a Group Task , 1991 .

[42]  Yan Chen,et al.  Group Identity and Social Preferences , 2009 .

[43]  Ethnic Identity and the Labour Market 1 Ethnic Identity and the Labour Market , 2005 .

[44]  A. Rustichini,et al.  Individual Behavior and Group Membership , 2006 .

[45]  M. Brewer.  The Social Self: On Being the Same and Different at the Same Time , 1991 .

[46]  Raymond T. Garza,et al.  Social group salience and interethnic cooperation , 1985 .

[47]  A. Alesina,et al.  Ethnic Diversity and Economic Performance , 2003 .

[48]  W. Easterly,et al.  Africa's Growth Tragedy: Policies and Ethnic Divisions , 1997 .

[49]  A. Alesina,et al.  Participation in Heterogeneous Communities , 1999 .

[50]  Mary Kay Gugerty,et al.  Ethnic diversity, social sanctions, and public goods in Kenya , 2005 .

[51]  R. Fishe,et al.  AN ECONOMIC ANALYSIS OF GROUP LENDING PROGRAMS IN DEVELOPING COUNTRIES , 1993 .

[52]  H. Tajfel,et al.  Social categorization and intergroup behaviour , 1971 .

[53]  J. Poterba.  Demographic change intergenerational linkages and public education. , 1998 .

[54]  Maroš Servátka,et al.  Group Identity and Relation-Specific Investment: An Experimental Investigation , 2011 .

[55]  Roberto A. Weber,et al.  Exploiting Moral Wriggle Room: Behavior Inconsistent with a Preference for Fair Outcomes , 2004 .

[56]  Florencio Lopez-de-Silanes,et al.  The quality of government , 1999 .

[57]  Rachel T. A. Croson,et al.  Groups Work for Women: Gender and Group Identity in Social Dilemmas , 2008 .

[58]  Macartan Humphreys,et al.  Why Does Ethnic Diversity Undermine Public Goods Provision? , 2007, American Political Science Review.

[59]  Muzafer Sherif,et al.  The Robbers Cave experiment : intergroup conflict and cooperation , 1988 .

[60]  E. Fehr,et al.  Cooperation and Punishment in Public Goods Experiments , 1999, SSRN Electronic Journal.

[61]  C. Cadsby,et al.  Gender and free riding in a threshold public goods game: Experimental evidence , 1998 .

[62]  John L. Solow,et al.  Group identity and gender in public goods experiments , 2002 .