Two's Company, Three's a Group: The impact of group identity and group size on in-group favouritism

In this study, we use an allocation game to study the effects of group identity and group size on in-group favouritism when the person's own payoff is not affected by her decision. We first show that in a triadic setting when the subjects are asked to allocate a fixed amount of resource between two other anonymous individuals, the majority of the subjects choose to allocate equal amounts to both the in-group and the out-group members. Contrary to previous studies, when group identity is induced artificially by simply telling the subjects that they belong to the same `group', it does not appear to significantly increase the amount allocated to the in-group member relative to the out-group member in a triadic setting. However, once the number of the in-group recipients is increased from one to three, the same artificial group identity triggers a sharp increase in in-group favouritism. Our results suggest that in order for favouritism to be clearly observed, not only that group identity has to be present, but also the group needs to consist of more than two members.