Seminars

Abstract: How does group identity affect promotion decisions, and what impact does it have on the performance of organizations through promotions? We provide answers based on two experiments in which we identify the effect of group identity on the employer’s preferences regarding whom to promote, the employer’s expectations of post-promotion effort of promoted and non-promoted workers, and the post-promotion effort itself. In Experiment 1, we find that group identity impacts the employer’s preferences. The employer is more likely to promote an in-group worker when the productivities of the in-group and the out-group workers are the same but also when the in-group worker is observably less productive, the latter of which results in lower overall performance. In Experiment 2, we observe that not getting promoted decreases the effort of the out-group worker but not of the in-group worker and that the employer has correct expectations of workers’ effort in the presence of group identity. When comparing expectations and the promotion decision of individual employers, we find that many employers promote an in-group worker not only when they expect the same combined effort from promoting an in-group or out-group worker but also when they expect lower higher combined effort from promoting an inout-group worker . This in-group bias in the promotion decision results in a significant loss of efficiency.

*본 세미나는 VEAEBES(Virtual East Asia Experimental and Behavioral Economics Seminar series) 주최로 열리는 세미나입니다.

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