Groups are very prevalent in organizations and society. Previous experiments on groups have mainly investigated how "minimal groups," which are only arbitrary labels, like "red" and "blue" group, can influence prosocial behavior, like altruistic cooperation and norm enforcement. But real groups are often more than just a label; they also involve social interactions leading to social ties, i.e., emotional bonds, between group members. Our experiments compare randomly assigned minimal groups to randomly assigned groups involving real social interactions. Random assignment to real groups identifies the causal impact of social ties.
We find that minimal groups focus individuals on elevating relative group payoffs, for example by cooperating more with one's own group, and punishing in-group members less hard for defection. We find a somewhat stronger effect of groups with social ties on in-group cooperation. By contrast, adding social ties changes the pattern of norm enforcement: In-group members are punished just as hard as out-group members for defection, and punishment is more fierce if the victim of defection is from the in-group. We suggest heightened empathy between group members as a proximate mechanism underlying the effects of social ties. Our findings contribute to the micro-foundation of theories of social group preferences, showing that both labeling and social ties effects of groups need to be taken into account.
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