Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279357 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10606
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
While the existence of the in-group bias is a well-researched phenomenon in Economics, the established findings are of limited value for understanding its dynamics in the context of challenging societal and economic times. The aim of this paper is to shed more light on whether intergroup discrimination manifests itself differently in a loss compared to a gain domain (corresponding to periods of economic upturns and downturns). We run an online experiment with natural identities, in which participants allocate money between three recipients who vary in the social distance to the decision-maker. We find that, on average, the in-group favoritism documented in the gain domain vanishes in the loss domain. While this result seems to imply that participants become egalitarian in the loss domain, it is actually driven by out-group favoring allocation types becoming more extreme in their decisions. Overall, the loss domain leads to a stronger polarization regarding the question of how different social groups in the society should be treated.
Subjects: 
in-group bias
favoritism
discrimination
gain and loss domain
polarization
JEL: 
C99
D30
D63
D91
J10
J15
Document Type: 
Working Paper
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