In-group and out-group biases in the marketplace: A field experiment during the World Cup

Sang Hyun Kim, Fernanda L. Lopez de Leon

Research output: Contribution to journalArticle

Abstract

We investigate the effects of group identity on discrimination by conducting an audit study in electronics markets in Brazil during the 2014 Brazil World Cup. Buyers’ group membership was identified by the shirts of the national football teams which were controlled in the experiment. We then exploit the outcomes of the WC matches, which arguably affected the salience of sellers’ group identity, to identify discrimination. 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 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 was motivated entirely by economic profits. Instead, the results are more consistent with Becker’s taste-based discrimination theory and shed light on the ways in which ingroup and out-group biases occur in market outcomes.

Original languageEnglish
Pages (from-to)528-547
Number of pages20
JournalOxford Economic Papers
Volume71
Issue number3
DOIs
Publication statusPublished - 2019 Jan 1

Fingerprint

Field experiment
Outgroup
Brazil
Discrimination
Shirt
Buyers
Seller
Group identity
Favoritism
Audit
Football
Group membership
Electronic markets
Economic profit
Experiment

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

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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, Fernanda L.

In: Oxford Economic Papers, Vol. 71, No. 3, 01.01.2019, p. 528-547.

Research output: Contribution to journalArticle

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