Towards an Understanding of the Endogenous Nature of Identity in Games John Smith Rutgers University-Camden, Economics with Katerina Bezrukova Santa Clara University, Psychology

2 Motivation Q: Does the strategic setting affect identity?  A: Yes Q: How is it affected?  A: Game type interacts with action selected Q: What is the timing of the identity change?  A: Largely after action is selected Q: What causes the magnitude of the change?  A: Increasing in perception of competitiveness Decreasing in perception of cooperativeness

3 Strategic Setting 100,10045, ,4550,50 You C D CD Someone Else You C D 100,1000, ,050,50 Someone Else CD “Mean” Game “Nice” Game Mutually Beneficial Outcome Nash Equilibrium

4 Strategic Setting 100,10045, ,4550,50 You C D CD Someone Else You C D 100,1000, ,050,50 Someone Else CD “Mean” Game “Nice” Game “Cheating” yields 5“Cheating” yields 50

5 Identity and Psychology Literature Since Tajfel in 1970’s Place people into “minimal” groups  Observe subjects  discriminate against members of other groups  favor members of own group Identity affects behavior

6 Identity in the Psychology Literature Some psychologists prefer to study identity in Minimal Groups Groups which  Did not exist prior to experiment  Based on a trivial criteria If identity effects can be found in minimal groups  likely to be stronger for “nontrivial” groups  demonstration of fundamental characteristic of people Ingroup: of the same group Outgroup: of different groups

7 Identity in the Economics Literature Chen and Li (2007) Ali (2007) Charness, Rigotti and Rustichini (2007) Eckel and Grossman (2005) Either Manipulates identity or Observes difference in behavior to ingroup and outrgoup opponents By contrast  We do not directly manipulate identity  We measure changes in identity due to the strategic setting

8 Related Economics Literature Guth, Levati and Ploner (2008) Measures identity in a strategic setting Carpenter (2005) Measures changes in preferences  based on competitiveness of setting Uses SVO and GARP

9 Experiment 130 students from six classes  for course credit  entry into lottery for $50 Each student placed into  Group X or Group Y  Last Digit of Student ID 0-4 into X 5-9 into Y Minimal group Group membership known  Subjects identified themselves

10 Experiment Half given “Mean” Game Half given “Nice” Game  Select a single action Told that would play game with  Everyone in group  Who received same game Average payoffs attained  Go towards lottery Higher average payoffs More likely to win prize

11 Identity Measure 1. How much do you like being a member of the group? 2. How much do you feel that you belong to the group? 3. How strong are your ties to the group? 4. How pleased are you to belong to the group? 5. How important is the group to you? 6. How much do you identify with the group? Adapted from Grieve and Hogg (1999)  Appropriate for minimal group setting  Scale of indicated a negative preference 4 indicated "no opinion“ 7 indicated a positive preference

12 Competitiveness Measure 1. When I make a decision, I only consider my own welfare 2. I make decisions so that my outcome is relatively better than the outcome for others  Scale of 1-7 Adapted from Beersma and DeDreu (1999)

13 Cooperativeness Measure 1. People know that they can depend on me 2. I cooperate with others 3. I consider how my decisions affect the welfare of others 4. When making a decision involving my welfare and the welfare of others, I select the choice which gives the best joint outcome  Scale of 1-7 Adapted from Beersma and DeDreu (1999)

14 Timeline Time 1:  Before subject knows game  Measure baseline competitiveness and cooperativeness  Measure baseline identity Time 2:  After game type known but before action selected  Measure identity Time 3:  Choice of C or D  Measure competitiveness and cooperativeness  Measure identity

15 Identity Measure Asked same identity questions all three times To minimize bias towards previous answers  Had subjects pass forward sheets after completion  Used different color paper to verify

16 Results-Identity Alphas Identity Measure Measure of reliability  How effectively are we measuring latent variable?  Between 0 and 1  Acceptable threshold:  ≥ 0.7 Time 1:  =0.810 Time 2:  =0.858 Time 3:  =0.885

17 Results Did the manipulation induce different choices? Nice Game:  D: 31  C: 37 Mean Game:  D: 42  C: 20  2 (1,129)=6.465 p=0.011

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19 t-test p=0.910

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21 No significant relationships

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25 p=0.053 p=0.273 p=0.332 t-test Significance Mann- Whitney 0.036

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29 No significant relationships

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33 p=0.016 p=0.076 p=0.217 t-test

34 Changes in Identity Perhaps absolute value of identity less important than changes in identity? Difference in Identity between  Time 1 and  Time 3  Given Action and Game Type

35 Changes in Identity Difference in Time 3 and Time 1 Identity Given Nice Game who played C:  Mean: Given Nice Game who played D:  Mean: t-test p-value:

36 Changes in Identity: Timing When does the change between Time 1 and 3 occur? Between Time 2 and Time 3?  Only after selecting action Or between Time 1 and Time 2?  Only after seeing game type but before action choice

37 Changes in Identity: Timing Difference in Time 3 and Time 2 Identity Given Nice, select C Mean: Given Nice, select D Mean: t-test p-value:  Difference in Time 2 and Time 1 Identity Given Nice, select C Mean: Given Nice, select D Mean: t-test p-value:  Actually making the choice affects identity In the Nice Game

38 Changes in Identity No such relationship exists for the Mean Game Being cooperative in Nice Game  Stronger identification with group Being uncooperative in Nice Game  Weaker identification with group

39 Cooperation and Competition What drives the change in identity? Difference in Competitiveness between Time 1 and Time 3  Mean or Nice Game  C or D Difference in Cooperativeness between Time 1 and Time 3  Mean or Nice Game  C or D

40 Perception of Cooperation Difference in Time 3 and Time 1 Coop. Given Nice, select C Mean: Given Nice, select D Mean: t-test p-value:  Difference in Time 3 and Time 1 Coop. Given Mean, select C Mean: Given Mean, select D Mean: t-test p-value:  In the Nice Game playing C more cooperative than D In the Mean Game playing C not more cooperative than D

41 Perception of Competition Difference in Time 3 and Time 1 Comp. Given Nice, select C Mean: Given Nice, select D Mean: t-test p-value:  2.154x10 -7 Difference in Time 3 and Time 1 Comp. Given Mean, select C Mean: Given Mean, select D Mean: t-test p-value:  In the Nice Game playing C less competitive than D Also true for Mean Game Stronger in Nice Game

42 Cooperation and Competition Evidence that undertaking  more competitive actions or  less cooperative actions Reduces identity

43 Study 2 40 Students in same setup as before except Asked for single choice to be played against  ingroup  and outgroup Subset of earlier N=130 Pooling does not qualitatively change the analysis from the earlier study  However there are some differences

44 Study 2 We now have data on  Ingroup choices  Outgroup choices  Game in which choices were made

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46 Discriminating Actions Nondiscriminating Actions

47 p= p= p=

48 Ingroup/Outgroup Actions Recall that in initial study In Nice Game:  Action against ingroup affects identity In Mean Game:  Action against ingroup does not What can we say about the outgroup action?

49 Outgroup Choice Difference between Time 3 and Time 1 Identity in Nice Game Given Outgroup choice: D  Given Outgroup choice: C  t-test:  p=0.177 Difference between Time 3 and Time 1 Identity in Mean Game Given Outgroup choice: D  Given Outgroup choice: C  t-test:  p=0.0276

50 Ingroup Choice Difference between Time 3 and Time 1 Identity in Nice Game Given Ingroup choice: D  Given Ingroup choice: C  One sided t-test:  p=0.114 Difference between Time 3 and Time 1 Identity in Mean Game Given Ingroup choice: D  Given Ingroup choice: C  One sided t-test:  p=0.292

51 Ingroup/Outgroup Actions In Nice Game,  actions against ingroup members affect identity In Mean Game,  actions against outgroup members affects identity

52 Conclusion Identity endogenous in *a* game  Depends on game type and action choice  Nice Game, ingroup actions affect identity  Mean Game, outgroup actions affect identity Largest identity change occurs only after action taken

53 Conclusion Identity seems to measure  Less a propensity for cooperation with ingroup but rather the propensity to select a discriminatory action:  C in ingroup, D in outgroup  D in ingroup, C in outgroup over a nondiscriminatory action:  C in ingroup, C in ingroup  D in ingroup, D in ingroup

54 Discussion Different questions to measure identity  Avoid status quo bias? What happens if  games repeated?  feedback provided? Does change in identity affect future behavior?  Is new identity more or less helpful in predicting behavior?

55 Discussion Performed with different games:  Battle of sexes, chicken, etc. Relationship between identity and SVO?  Together better predict behavior?