Social stigma and subsequent competitive behavior

2019-10-14

2019-11-14

Benefit Claim
Competitiveness

Part 1: Status assignment and benefit allocation
Part 2: Competition
Part 3: Additional tasks

Part 1: Status assignment and benefit allocation
Participants are randomly grouped in groups of 3. They are informed that they will complete a 15-question general knowledge quiz that will assign them a status within their group. Each status is assigned a differential payment scheme, and this is information given ahead of time. Once the quiz is completed, they are notified that certain individuals are eligible for an additional benefit. In the control, only those who are low status are eligible for an additional $1. In the plausible deniability treatment, those in the low and middle status are eligible for a $1 benefit. They are notified that they must come up to the front of the room if they want this additional benefit. Once they have the opportunity to decide if they want this benefit if eligible, they learn their status. The experimenter then calls those who claimed the benefit to the front of the room to receive a token for the additional $1.

Part 2: Competition

Following Niederle & Vesterlund (2007), participants first complete as many five 2-digit summations as possible in 5 minutes, paid at 50 cents per correct answer (piece-rate). They are then given the option to either do the same exercise again at the same payment schedule or select into competition within their group assignment from the first exercise. If choosing to compete, the payment is $1.50 per correct answer for the winner and $0 otherwise. They do not know their performance at any stage, but are asked what their beliefs are regarding their own relative performance.

Part 3: Additional tasks
These include risk preferences, social preferences, shyness, and demographics to check for balance and covariates.

Alternate treatments

session level

Yes

100 groups of 3

300

150 control, 150 treatment

Based off of Friedrichsen, König, and Schmacker (2018) public quiz versus random subsidized treatment, 12.8 percentage points difference in claim of the benefit (sd 0.071) would result in a sample size of 266.

Social signaling influences economic behavior. For instance, individuals may exhaust resources to competitively signal higher levels of social status. Conversely, individuals may avoid signaling their status to minimize the stigma associated with low status. We conduct a laboratory experiment to explore how the stigma from benefit eligibility drives subsequent decisions to enter a tournament competition. Similar to previous work, we induce a stigma associated with a benefit for the low-status group. We then introduce a treatment to reduce stigma by expanding the benefit eligibility to a middle-status group in a ``plausible deniability'' treatment. While we do not observe evidence of a stigma affecting benefit take-up for the low-status group, we do observe a difference in preferences for competitiveness in a subsequent and unrelated task. When newly-eligible individuals qualify for the benefit, their rate of entry into a subsequent and unrelated tournament is reduced by 17-20 percentage points compared to the treatment in which they do not qualify. A potential interpretation of our results would suggest expansion of eligibility of certain government assistance programs may produce unintended consequences for the newly eligible.

Valdez Gonzalez, Natalia and Brown, Alexander L. and Palma, Marco A., Social-Benefits Stigma and Subsequent Competitiveness. Available at SSRN: https://ssrn.com/abstract=4479804 or http://dx.doi.org/10.2139/ssrn.4479804

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4479804