LAUSR

In this study, we investigate how and why people discriminate among different groups, including their in-group and multiple out-groups. In a laboratory experiment, we use dictator games for five groups to compare actual transfers to in-group and out-group agents with the respective beliefs held by dictators and recipients in these groups. We observe both in-group favoritism and discrimination across multiple out-groups. Individuals expect others to be in-group biased, as well as to be treated differently by different out-groups. We find that dictators’ in-group favoritism is positively related to the degree of in-group favoritism they expect other dictators to exhibit. Moreover, we find that a dictator tends to be relatively more generous toward a specific out-group when he or she expects that dictators belonging to that out-group are generous toward members of his or her in-group. Thus, our study provides evidence for indirect reciprocation expectation.