A stranger in a strange land: Promises and identity

Social identity and communication are topics of increasing interest in management science. One’s social identity tends to lead one to favor those belonging to one’s group; this in-group bias may lead to problematic relationships. At the same time, communication has been found to have beneficial social consequences in controlled laboratory experiments. An important question is whether communication, by signaling a meeting of the minds, can improve trust and therefore outcomes between out-group members. We construct a simple weak mechanism of group favoritism that does in fact show in-group favoritism. When both paired individuals, one of whom will become the dictator, promise to make the pro-social dictator choice if they become dictator, favorable behavior is much more likely in all cases. But there is an intriguing pattern across group membership concerning the degree of improvement: Without mutual promises, people make more favorable choices for in-group members. Interestingly, this gap is eliminated by such promises. In this sense, strangers become partners.