Identity as an excuse: opportunistic identity management in labor markets

Last registered on January 03, 2023

Pre-Trial

Trial Information

General Information

Title
Identity as an excuse: opportunistic identity management in labor markets
RCT ID
AEARCTR-0009693
Initial registration date
December 23, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 03, 2023, 5:17 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
The Johannes Gutenberg University Mainz

Other Primary Investigator(s)

PI Affiliation
The Johannes Gutenberg University Mainz
PI Affiliation
Leibniz Institute for Financial Research SAFE

Additional Trial Information

Status
In development
Start date
2022-12-23
End date
2023-01-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
A large body of evidence shows that group identity fosters cooperation, coordination, and trust. However, little is known about exploitation of group identity to justify self-serving behavior. We use a novel laboratory experiment to study whether, and if so to what extent, people make strategic group identity choices to behave opportunistically in the context of labor markets. At the beginning, in an effort choice setting, participants work in groups for two distinct firms, creating two potential group identities. Subsequently, participants in the role of a principals make wage offers to participants in the role of agents for a newly founded firm. As our treatment, we vary the disclosure of agents’ employment history to the principal, i.e., their previously shared group memberships. We conjecture that participants strategically search for or avoid additional information about agents’ employment histories to find dissimilarities. Finding dissimilarities allows principals to identify strategically with the non-shared group to justify outgroup wage discrimination.
External Link(s)

Registration Citation

Citation
Bauer, Kevin, Evgeniya Chabanova and Florian Hett. 2023. "Identity as an excuse: opportunistic identity management in labor markets." AEA RCT Registry. January 03. https://doi.org/10.1257/rct.9693-1.0
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2022-12-23
Intervention End Date
2023-01-31

Primary Outcomes

Primary Outcomes (end points)
Allocations in dictator game, willingness-to-pay (WTP), elicited beliefs, information acquisition
Primary Outcomes (explanation)
Allocations in dictator game: we measure dictator's choices on how much to allocate to recipients conditional on their group affiliations.
Willingness-to-pay (WTP): we measure costs individuals via the Becker-DeGroot-Marschak (BDM) mechanism are willing to bear to hire a particular recipient, conditional on their group affiliations.
Elicited beliefs: Participants are asked to state their beliefs about the unobserved group affiliation of recipients.
Information acquisition: We measure whether participants decide to gain or avoid information about the second group affiliation of each recipient.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We test 3 mechanisms for opportunistic identity management and, hence, run three experiments:
1) avoiding the situation where identity matters altogether (experiment 1);
2) strategic belief formation about others’ identity (processing exogenous information; experiment 2);
3) strategic information avoidance or seeking for strategic belief formation (demand for information; experiment 3).

Each experiment comprises three consecutive stages. In stage 1, participants gain job experience: they are randomly assigned to work sequentially at two different firms. The two firms are the two groups which constitute the participant’s social identity throughout the experiment. In stage 2, participants move to a new firm in the role of principal and hire a professional (another participant) to work for them in this new firm. At the hiring stage the principal observes CVs of several candidates and decide upon their wages. One of the candidates is then randomly selected to work together with the principal. In stage 3, participants work together in the newly established firms.
Wages offers for the candidates in stage 2 are realized as dictator game in which dictator (i.e., the principal) sets wages for all offered candidates and one of the candidates is randomly selected to be hired. Candidates vary in their previously gain job experience.
Experimental Design Details
Experiment 1: Avoiding the situation where identity matters altogether

Stage 1 – gaining job experience

In this stage, participants will be randomly assigned to work in two different firms in sequence to gain job experience. Their social identity within the experiment is based on the job experience they get at the first stage. They learn that there is a creative industry which comprises four firms: A, B, C, D. Participants will be randomly assigned to work at one of these firms first and then the other. The possible combinations of work experience are: A+C, A+D, B+C, or B+D. It is not possible to have combinations A+B or C+D.
Participants in each firm will work on a group task to create a logo for a client. They will choose options for the background color, font, text position, and logo icon, and provide a short explanation for their choice. Their colleagues' suggestions for the logo, including a short explanation, will also be displayed to increase salience. This task is asynchronous, non-performative, and non-incentivized, and is intended to strengthen social identities.

Stage 2 – promotion in a new firm

In this stage, participants move to a new firm and must hire a creative professional to work for them. They will consider three candidates who differ in their previous job experience. One candidate has the same job experience as the participant, meaning they both worked for the same two firms. We interpret this as Ingroup + Ingroup. Another candidate has partially matching work history with the participant, meaning they both worked for one firm but gained another job experience in different firms. For instance, the participant has experience A+C and the candidate – A+D. We interpret this as Ingroup + Outgroup. The last candidate does not have any common job experience with the participant. We interpret this as Outgroup + Outgroup.
In the control arm, participants state their willingness-to-pay (WTP) to work with each of the three candidates, making three decisions in total. This is an implementation of Becker-DeGroot-Marschak (BDM) mechanism.
In the treatment arm, participants will simultaneously state the WTP to work with each candidate and choose wages for each candidate in a dictator game setting. This means they will state their WTPs and select wages for all three candidates.
The stated WTP to hire each candidate will influence the probability of hiring them. The higher the stated WTP, the more likely the candidate will be hired. Participants will be given detailed explanations of how their stated WTP affects the probability of hiring a candidate. Based on the stated WTPs, one of the candidates will be randomly selected and hired. The wage selected by the participant for this candidate will determine the payoff.

Treatment variation

In the control arm, we aim to measure “pure identity effect”, which is the tendency of individuals to prefer others with similar job experience without considering monetary trade-offs. We will do this by measuring the stated WTP to work with each candidate.
In the treatment arm, we aim to test if financial incentives may affect how people think about their identity. On the one hand, people often favor member of their in-group over out-group members. This tendency is commonly known as “in-group favoritism”. In our setting, this could explain a stronger willingness to hire a candidate with similar work history. On the other hand, there may be pressure to offer a higher wage to such a candidate. By measuring both WTPs and wages for all candidates, we can test if participants try to avoid hiring someone with the same job experience by calibrating their WTPs and make a lower wage offer to the candidate with non-matching job experience. This will be done by having participants simultaneously choose their WTPs for all candidates and select wages in a dictator game setting.

Stage 3 – joint work in the new firm

Based on the chosen WTPs for all candidates in the previous stage, one candidate is hired. The manager’s job is to create a task for the newly hired creative professional. The manager selected visual guidelines for logo inspirations, color palette, and font types. Subsequently, the creative professional is going to develop a logo for an account following the manager’s guidelines.

Experiment 2: Strategic belief formation about others’ identity

Stage 1 – gaining job experience
Same as in the experiment 1.

Stage 2 – promotion in a new firm
In this stage, each participant moves to a new firm and needs to hire a creative professional to work for them. They will consider two different candidates. For each candidate, they will only observe one of the two firms where the candidate has worked before. The other firm of each candidate is unknown to the participant. Based on the observed job experience, a candidate has either worked at a firm where the participant has also worked (Ingroup) or a candidate does not have any shared observable experience with the participant, i.e., the candidate has worked for a different firm (Outgroup).
In the control arm, participants will be asked about their beliefs about the unknown firm of each candidate. In other words, they are asked to make a prediction, whether a candidate has worked in the same firm (Ingroup) or a different one (Outgroup). They will do this by making a monetary bet, and if their prediction is correct, they will receive an additional monetary reward. Participants make their decisions one after another on different pages.
In the treatment arm, in addition to making a bet, the participant will also simultaneously decide on the wage they would pay to each candidate. One of the decisions is randomly selected to determine the payoff. Participants make their decisions about each candidate separately, or one after another on different pages.
In the treatment, we aim to test if financial incentives can distort the belief formation. In the baseline, we expect on the sample level that participants with equal probability choose either an Ingroup or Outgroup firm as their bet. However, in the treatment, when they are also making wage decisions at the same time, they may be more likely to bet on the Outgroup firm. This belief that the candidate has worked at a different firm may make the participant feel less similar to the candidate and therefore justify offering a lower wage.

Stage 3 – joint work in the new firm
One of the two candidates will be randomly selected to join the new firm. The task is as in the experiment 1.

Experiment 3: Strategic information avoidance or seeking for strategic belief formation

Stage 1 – gaining job experience
Same as in the experiment 1.

Stage 2 – promotion in a new firm
This stage is very similar to stage two in the previous experiment, with the only difference being that participants can obtain complete the employment history of the recipient at no additional cost.
In the control arm, participants will first state their belief, as described in the previous experiment. Then, on the next page, they have the option to gain or avoid the information about the unobserved firm for which one candidate has worked. This decision does not incur any cost. Subsequently, participants will also state their belief and decide whether they want complete information about the other candidate.
In the treatment arm, participants will first state their belief and choose a wage for a candidate and then have the option to learn the unobserved firm for which a candidate has worked. One of the candidates will be randomly selected, and the chosen wage determines the payoff.
In the treatment, we aim to test if, in the presence of financial incentives, participants will opportunistically gain or avoid information about the employment histories of the candidates to find dissimilarities that would justify their wage decisions.

Stage 3 – joint work in the new firm
One of the two candidates will be randomly selected to join the new firm. The task is as in the experiment 1.
Randomization Method
Randomization is done by a computer.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
150-240 individuals per treatment arm, i.e., ~1000 participants in total
Sample size: planned number of observations
150-240 individuals per treatment arm, i.e., ~1000 participants in total
Sample size (or number of clusters) by treatment arms
Experiment 1: approx. 150 individuals in the control arm and approx. 150 individuals in the treatment arm
Experiment 2: approx. 180 individuals in the control arm and approx. 180 individuals in the treatment arm
Experiment 3: approx. 240 individuals in the control arm and approx. 240 individuals in the treatment arm
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Gemeinsame Ethikkommission Wirtschaftswissenschaften der Goethe-Universität Frankfurt und der Johannes Gutenberg-Universität Mainz
IRB Approval Date
2022-07-05
IRB Approval Number
N/A
Analysis Plan

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials