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 journalArticlepeer-review

3 Citations (Scopus)

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 Jul 1

Bibliographical note

Funding Information:
This work was supported by National Research Foundation of Korea Grant funded by the Korean Government [NRF-2014S1A5A2A03065638].

Publisher Copyright:
© Oxford University Press 2018. All rights reserved.

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'In-group and out-group biases in the marketplace: A field experiment during the World Cup'. Together they form a unique fingerprint.

Cite this