Date: 2015
Type: Working Paper
Group formation, in-group bias and the cost of cheating
Working Paper, EUI MWP, 2015/04
MICHAELI, Moti, Group formation, in-group bias and the cost of cheating, EUI MWP, 2015/04 - https://hdl.handle.net/1814/35218
Retrieved from Cadmus, EUI Research Repository
Group formation and in-group bias -- preferential treatment for insiders -- are widely observed social phenomena. This paper demonstrates how they arise naturally when people incur a psychological cost as the result of defecting when facing cooperators, when this cost is increasing and concave in the number of such defections. If some group members are asocial, i.e., insusceptible to that cost, then, under incomplete information, free-riding and cooperation can coexist within groups. Signaling of one's type can enable groups to screen out free-riders, but signaling is costly, and its availability may decrease the welfare of all the individuals in society.
Cadmus permanent link: https://hdl.handle.net/1814/35218
ISSN: 1830-7728
Series/Number: EUI MWP; 2015/04
Keyword(s): In-group bias Group formation Costly signaling Prisoner's dilemma game D7 D03 Z13 D64 D82 C72