Discrimination As Favoritism: The Private Benefits And Social Costs Of In-Group Favoritism In An Experimental Labor Market

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
David L. Dickinson Ph.D., Professor (Creator)
Appalachian State University (ASU )
Web Site: https://library.appstate.edu/

Abstract: We examine both the private benefits and spillover costs of labor market favoritism in a unique laboratory experiment design. Our data show that both employment preference and wage offers favor in-group members. Workers positively reciprocate towards in-group employers by choosing higher effort in a gift-exchange game. Thus, favoritism can be privately rational for employers. However, unemployed subjects are allowed to burn resources (at a cost to themselves), and we document significantly increased resource destruction when unemployment can be attributed to favoritism towards others. This highlights a significant spillover and often ignored cost of favoritism, and it points to one possible micro-foundation of some antisocial behavior.

Additional Information

Dickinson, D., Masclet, D., and Peterle, E. (2018). Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market, European Economic Review. Volume 101, May 2018. Pages 220-236. Publisher version of record available at: https://doi.org/10.1016/j.euroecorev.2018.03.004
Language: English
Date: 2018
Discrimination, Experimental economics, Social identity, Conflict

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