Abstract:Experimental studies of favoritism and corruption typically examine such behavior among strangers, but ethnic and kinship ties have long been viewed as potential catalysts for favoritism, and hence corruption.
In this paper, we provide evidence from lab experiments on the effect of kinship and ethnic
ties on favoritism. We report behavior in a game where the first mover chooses whether to offer a
transfer payment and the second mover chooses to reject or accept it, and upon acceptance, whether
to incur a cost to provide a benefit to the first mover at the expense of third party. In three countries,
we recruit kin, co-ethnics and strangers to the lab and systematically vary the relationship(s) between
the players of the game to observe how kin and ethnic ties influence the willingness of the first- and
second-mover to benefit one another at the expense of a third party. We see kin favoritism in all societies,
but we find some evidence that the degree of ethnic favoritism, and favoritism towards other
in-group members (friends) varies. We provide evidence this may be related to kinship patterns, since
favoritism is more common in societies with more in-marriage and denser kin networks.