Banuri, Sheheryar, Eckel, Catherine and Wilson, Rick K. (2022) Does cronyism pay? Costly ingroup favoritism in the lab. Economic Inquiry, 60 (3). pp. 1092-1110. ISSN 0095-2583

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Abstract

Cronyism in firms arises when favoritism toward an ingroup affects personnel decisions. Two main motives underlie cronyism: profit, if an ingroup employee works harder; or altruism, if used to transfer resources. In a lab-experiment trust game with naturally-occurring groups, an employer (proposer) faces an employee (responder) who is or is not an ingroup member. We see that both motives play a role. Cronyism is more likely from employers who are more altruistic to the ingroup in a dictator game; and even low-productivity (by design) ingroup members reciprocate trust generously. Cronyism pays for those who engage in it.

Item Type:	Article
Additional Information:	Research Funding: National Science Foundation. Grant Number: SES-0921884
Uncontrolled Keywords:	cronyism,group identity,ingroup,discrimination,trust,reciprocity,lab experiment
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	LivePure Connector
Date Deposited:	08 Feb 2022 10:30
Last Modified:	24 May 2022 14:48
URI:	https://ueaeprints.uea.ac.uk/id/eprint/83343
DOI:	10.1111/ecin.13080

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