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Social Centipedes: the Impact of Group Identity on Preferences and Reasoning

by Chloé Le Coq (with J. Tremewan and A. Wagner), SITE Working Paper

Using a group identity manipulation we examine the role of social preferences in an experimental one-shot centipede game. Contrary to what social preference theory would predict, we fi nd that players continue longer when playing with outgroup members. Our explanation rests on two observations: (i) players should only stop if they are sufficiently con fident that their partner will stop at the next node, given the exponentially-increasing payoff s in the game, and (ii) players are more likely to have this degree of certainty if they are matched with someone from the same group, whom they view as similar to themselves and thus predictable. We find strong statistical support for this argument. We conclude that group identity not only impacts a player's utility function, as identi fied in earlier research, but also a ffects her reasoning about the partner's behavior.

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SITE Education Publication Working paper