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In-group and Out-group Biases in the Marketplace: A Field Experiment during the World Cup

Kim, Sang-Hyun, Lopez de Leon, F. (2019) In-group and Out-group Biases in the Marketplace: A Field Experiment during the World Cup. Oxford Economic Papers, 71 (3). pp. 528-547. ISSN 0030-7653. E-ISSN 1464-3812. (doi:10.1093/oep/gpy054) (KAR id:65163)

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We investigate the effects of group identity on discrimination by conducting an audit study in electronics markets in São Paulo, Brazil during the 2014 Brazil World Cup (WC). We manipulated buyers' group membership, by making them wear shirts of national football teams, and exploit the outcomes of the WC matches, which arguably affected the salience of sellers' group identity. Although we find that foreigners are overcharged, we do not detect discrimination against buyers wearing a rival team shirt. In contrast, we do detect in-group market favouritism (i.e., lower prices) towards buyers wearing the Brazil shirt when Brazil had won a match in the very recent past. Our analysis rejects the explanation that sellers' behaviour were always motivated by economic profits. Instead, the results indicate taste-based discrimination (Becker, 1957) and shed light on the ways in which in-group and out-group biases occur in market outcomes.

Item Type: Article
DOI/Identification number: 10.1093/oep/gpy054
Uncontrolled keywords: in-group and out-group discrimination, bargaining in the marketplace
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Fernanda Leite Lopez de Leon
Date Deposited: 10 Dec 2017 14:38 UTC
Last Modified: 09 Dec 2022 04:37 UTC
Resource URI: (The current URI for this page, for reference purposes)
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