OB Research Seminar - Rachel Kranton, Duke University

What are the sources of social divisions? Many empirical and experimental studies show that social divisions negatively impact economic outcomes. This experiment reverses the causal arrow and asks if economic settings affect how individuals perceive one another. Subjects receive information about counterparts’ traits (preferences and demographics) and then work for bonus pay by completing a real-effort task. Subjects who compete for pay against their counterparts report having fewer traits in common with their counterparts than subjects who work in a cooperative setting. This effect emerges despite that subjects have monetary incentives to report correctly the number of common traits. In response to a vaguer question about similarity to counterparts, women also report less similarity in the competitive setting than in the cooperative setting. In an experiment with descriptions of natural scenes in place of counterparts’ traits, cooperative vs. competitive settings do not have a significant effect on subjects’ reports of features in common.