Group Membership, Team Preferences, and Expectations (A new version of this paper is available as CEEL WP 3-12)

Group membership increases cooperation in social dilemma games, altruistic donation in dictator games, and fair offers in ultimatum games. While the empirical study of group action has grown rapidly over the years, there is little agreement at the theoretical level on exactly why and how group membership changes individual behaviour. According to most theorists, the effect of group framing is channelled primarily via the beliefs of group members, while a dissenting minority identifies changes in preference as the key explanatory mechanism. We report an experiment using the minimal group paradigm and a prisoner’s dilemma with multiple actions, in which we manipulate players’ beliefs and show that mutual knowledge of group affiliation is not necessary for group action. Our results question previous empirical findings, refute theories of social norms based on mutual expectations, and support a specific theory of team preferences based on “circumspect reasoning”