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Little is known about the economic mechanisms leading to the high level of clustering in behavior commonly observed in the data. We present a model where agents can interact according to three distinct mechanisms, and we derive testable implications which allow us to distinguish between the...
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from a laboratory experiment in which subjects choose their group membership, which is interpreted as decision to identify … with the respective group. Inducing a trade-off between monetary payoffs and different group identification choices we … individual out-group discrimination in allocation decisions, which has previously been shown to be associated with social …
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