Identity and Political Polarization
Paper Session
Saturday, Jan. 7, 2023 10:15 AM - 12:15 PM (CST)
- Chair: Eugen Dimant, University of Pennsylvania
Hate Trumps Love: The Impact of Political Polarization on Social Preferences
Abstract
Exhibiting altruism towards and cooperativeness with others is a key ingredient for successful work relationships and managerial decision-making. Rising political polarization creates a hazard because it ruptures this fabric and impedes the interaction of employees, especially across political isles. This paper's focus is to examine various behavioral-, belief-, and norm-based layers of (non-)strategic decision-making that are plausibly affected by polarization. I quantify this phenomenon via 5 pre-registered studies in the context of Donald J. Trump, comprising 15 well-powered behavioral experiments and a diverse set of over 8,600 participants. To capture the pervasiveness of polarization, I contrast the findings with various political and non-political identities. Overall, I consistently document strong heterogeneous effects: ingroup-love occurs in the perceptional domain (how close one feels towards others), whereas outgroup-hate occurs in the behavioral domain (how one helps/harms/cooperates with others). The rich setting also enables me to examine the mechanisms of observed intergroup conflict, which can be attributed to one's grim expectations regarding cooperativeness of the opposing faction, rather than one's actual unwillingness to cooperate. For the first time, the paper also tests whether popular behavioral interventions (defaults and norm-nudges) can reduce the detrimental impact of polarization in the contexts studied here. The tested interventions improve pro-sociality but are ineffective in closing the polarization gap.Competition, Cooperation, and Social Perceptions
Abstract
Do people perceive each other differently depending on the economic setting? Many empirical and experimental studies show that social divisions negatively impact economic outcomes. This experiment reverses the causal arrow and asks whether the nature of economic interactions affect people’s views of each other. Subjects who compete for bonus pay report having less in common with their counterparts than subjects who earn bonus pay in a cooperative setting, all else equal. This biased social perception emerges despite subjects having monetary incentives to state correctly how much they have in common with counterparts.The Economic Value of Identity
Abstract
In many situations, an individual’s sense of identity conflicts with economic incentives: if employees identify with their firm, do they invest sufficiently in competing firms to hedge their risk? How do environmentalists feel about investing their savings into oil and gas? Identity can affect such decisions through multiple channels: it can directly cause a psychological cost to invest into assets that violate one’s sense of identity. However, identity could also affect beliefs about the payoffs. We present a simple model that allows us to distinguish between these two channels. We apply the model in the context of Premier League clubs: in two large-scale field experiments, we present subjects with the option to invest into a range of bets that involve their supported team winning, losing, or drawing. We also present them with bets that do not involve any team they support. We measure their beliefs over outcomes and measure their investments. This allows us to estimate their risk aversion and identify the impact of identity on beliefs and the psychological costs from betting against one’s identity.Discussant(s)
Gary Charness
,
University of California-Santa Barbara
Billur Aksoy
,
Rensselaer Polytechnic Institute
Andrea Robbett
,
Middlebury College
Suanna Oh
,
Paris School of Economics
JEL Classifications
- C9 - Design of Experiments
- D9 - Micro-Based Behavioral Economics