Is it a Norm to Favour Your Own Group?

This paper examines the relationship between norm enforcement and in-group favouritism behaviour.  Using a new two-stage allocation experiment with punishments, we investigate whether in-group favouritism is considered as a social norm in itself or as a violation of a different norm, such as egalitarian norm.  We find that which norm of behaviour is enforced depends on who the punisher is.  If the punishers belong to the in-group, in-group favouritism is considered a norm and it does not get punished.  If the punishers belong to the out-group, in-group favouritism is frequently punished.  If the punishers belong to no group and merely observe in-group favouritism (the third-party), they do not seem to care sufficiently to be willing to punish this behavour.  Our results shed a new light on the effectiveness of altruistic norm enforcement when group identities are taken into account and help to explain why in-group favouritism is widespread across societies.