Are people willing to sacrifice resources to save one's and others' face? In a laboratory experiment, we study whether individuals forego resources to avoid the public exposure of the least performer in their group. We show that a majority of individuals are willing to pay to preserve not only...

We introduce a novel concept, group image concerns, showing that individuals change their behavior and are willing to incur personal costs to cultivate a positive image of their groups. We develop an experimental method to identify and quantify group image concerns, and conduct a series of...

This paper develops a model of social interactions with endogenous association. People are assumed to invest in relationships to maximize their utility. Even in a linear-in-means model, when associations are endogenous, the effect of macro-group composition on behavior is non-linear and varies...