Does cronyism pay? Costly ingroup favoritism in the lab

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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,trust,group identity,lab experiment,reciprocity,cronyism,discrimination,ingroup,economics and econometrics,business, management and accounting(all) ,/dk/atira/pure/subjectarea/asjc/2000/2002
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Faculty of Social Sciences > Research Groups > Behavioural Economics
Faculty of Social Sciences > Research Groups > Environment, Resources and Conflict
Faculty of Social Sciences > Research Groups > Behavioural and Experimental Development Economics
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Depositing User: LivePure Connector
Date Deposited: 08 Feb 2022 10:30
Last Modified: 12 Jun 2023 08:33
URI: https://ueaeprints.uea.ac.uk/id/eprint/83343
DOI: 10.1111/ecin.13080

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