What's Right When You're Left? The Impact of Minority Identity in Competitive and Cooperative Environments

38 Pages Posted: 15 Mar 2016 Last revised: 1 Mar 2017

See all articles by Simin He

Simin He

Shanghai University of Finance and Economics - School of Economics

Date Written: January 10, 2017

Abstract

We theoretically and experimentally explore the impact of minority identity in two contrasting environments: one that encourages competition (all-pay auction contest) and one that encourages coordination (minimum-effort game). There are two types of decision makers and two corresponding types of skills: the majority type and the minority type. Decision makers first decide how to invest between their skill sets, and then they are randomly matched to interacting with each other. We find that in the competitive environment, the minority group members have an advantage compared to the majority group members, as decision makers invest more on the majority skill to maximize chance of winning against the majority group members. In the cooperative environment, by contrast, the minority group members have a disadvantage compared to the majority group members, as decision makers tend to invest on the majority skill to facilitate coordination with the majority group members.

Keywords: minority, inequality, economic environment, laboratory experiment

JEL Classification: C72, C91, D63

Suggested Citation

He, Simin, What's Right When You're Left? The Impact of Minority Identity in Competitive and Cooperative Environments (January 10, 2017). Available at SSRN: https://ssrn.com/abstract=2747858 or http://dx.doi.org/10.2139/ssrn.2747858

Simin He (Contact Author)

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

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