Business Research

The Economic Motivation of Group Cohesion and Alienating Practices

From tattoos to criminal activity to wearing a certain color, groups, like gangs, demand behaviors and characteristics for inclusion that often make it more difficult to interact with those outside of the group.

At first glance, the acts seem extreme, like tattoos, but it's common within many groups to alienate members from non-members, since it has the effect of making members more reliant on those within the group.

The duo asked, "Does more time also equal more pressure to be correct? Working late nights with more stress-is it a bad thing?" For example, in the education world, when a student says he or she "pulled an all-nighter" to do a project, it can be a red flag to instructors.

"The groups seem to be counterproductive by reducing productivity and the opportunity to interact with new people," Jason Aimone, assistant professor of Economics, said. "Part of it is trying to understand how people behave in the world in general. We try to understand why religions and other groups, like gangs, do certain activities that make it hard for them to interact outside of the group."

Aimone looked into the economic motivation of the phenomena with fellow researchers Laurence R. Iannaccone, Michael D. Makowsky and Jared Rubin in the article, "Endogenous Group Formation via Unproductive Costs," which was published in the October 2013 issue of The Review of Economic Studies

The research isn't just limited to negative group associations. Sororities, fraternities and even churches use similar techniques to promote group participation.

"Setting yourself apart makes people do more work within a group, so it's more helpful for everyone within the group in question," Aimone said. "For example, in a church, if everybody participates in things like Sunday school, working in the nursery, attending fellowship, etc., everyone within the church gets more out of the experience. More internal participation means a more meaningful, interactive group experience."

When the researchers began the study, they were interested in whether economic motivation was a factor for group members.

"The problem is in interpreting data from activities that are natural in groups," he said. "It's hard to distinguish whether they make these choices, like getting certain tattoos in a gang, because they like the available choice, getting tattoos, or if it is because of the economic motivation."

To prove their thesis that there is an economic motivation involved, the researchers brought in George Mason University undergraduate students to play a game.

"We constructed a world where preference motivation does not play a factor," Aimone said. "It's simply economically motivated."

The researchers divided the 16 students into four groups and gave them ten tokens each. The tokens, if turned in as an individual, could be exchanged for $1. Instead of cashing in as an individual, a group could voluntarily pool some of its tokens to create a group account. If the students turned their tokens into the group account, each of the four members of the group would receive 40 cents per token, in other words the group account would hold $1.60, a greater spending power than any individual would receive for a token turned in individually.

These types of economic behavior studies have been done before, but the research team added another element. In a second round, students chose how much they would like to receive from a token turned in to their individual account. Once students decided by how much they'd be willing to reduce their private accounts, they were reorganized into four groups based on these decisions. The researchers observed that groups made of people who chose to reduce their private accounts contributed much more to their group. Groups made up of people who chose not to reduce their private accounts contributed very little to their groups.

"It was an untested theory," he said. "This allowed groups to push out 'free riders,' and allowed them to be more like-minded and cohesive. The strength of the results was even stronger than we expected."

Jason Aimone
Baylor University