HOW DOES SOCIAL DISTANCE INFLUENCE BEHAVIOR AT THE INDIVIDUAL LEVEL AND THE GROUP LEVEL? A STORY THROUGH EXPERIMENTAL ECONOMICS Von der Mercator School of Management, Fakultät für Betriebswirtschaftslehre, der Universität Duisburg-Essen zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaft (Dr. rer. oec.) genehmigte Dissertation von Dung V. Vu aus Hanoi, Vietnam 1 Referent: Prof. Dr. Markus Taube Korreferentin: Prof. Dr. Jeannette Brosig-Koch Tag der mündlichen Prüfung: 13.07.2016 Acknowledgement : A special thank you to the Deutsche Forchungsgemeinschaft (DFG) who funded my project, Professor Markus Taube for his academic support, Professor Brosig-Koch, Professor Dr. Heike Henning-Schmidt, Dr. Gari Walkowitz, Professor Xianghong Wang my colleagues Martin Heinberg, Kai Duttle, Chih-Chieh Wang, Taske Ueda, Huixia Wang, Xiu Chen who gave me comments, suggestions and logistics for the experiment, William Knapp for his valuable online lectures, Ian Coppers, Robert Reed and Joanna Rance for proofreading. 2 Contents: Preface..................................................................................................................................7 Chapter 1: Introduction ........................................................................................................9 Chapter 2: How does social distance influence public good behavior at the individual level? ...........................................................................................................................................20 2.1 Introduction ...................................................................................................................20 2.2 Literature review ...........................................................................................................26 2.3 Experimental design......................................................................................................29 2.3.1 Treatments .....................................................................................................................29 2.3.2 Procedure ......................................................................................................................30 2.3.3 Conjectures ...................................................................................................................32 2.4 Results ...........................................................................................................................33 2.5 Discussion .....................................................................................................................40 Chapter 3: Social distance approaches approach people as a piece of collective information- an experiment with corruption ...............................................................................................43 3.1 Introduction ....................................................................................................................43 3.2 Literature review ............................................................................................................48 3.3 Experimental method .....................................................................................................52 3.3.1 Design ...........................................................................................................................52 3.3.2 Procedure ......................................................................................................................54 3.3.3 Treatments .....................................................................................................................56 3.4 Results ............................................................................................................................58 3.4.1 Overview result .............................................................................................................58 3.4.2 Punishment effect ..........................................................................................................63 3.4.3 Information effect .........................................................................................................69 3 3.5 Discussion ........................................................................................................................71 Chapter 4: That we are in the same boat matters less than which boat we are in- the impact of social distance on group effect and division effect ...............................................................75 4.1 Introduction ....................................................................................................................75 4.2 Literature review ............................................................................................................79 4.3 Experimental design.......................................................................................................84 4.3.1 The game and identity separation .................................................................................84 4.3.2 Procedure ......................................................................................................................88 4.4 Results ............................................................................................................................88 4.5 Discussion ......................................................................................................................96 Chapter 5: General discussion and contribution ....................................................................99 References ..............................................................................................................................120 List of Tables: Table 1a: Kruskal-Wallis test across treatments of Chinese subjects ....................................34 Table 1b: Pairwise Wilcoxon rank-sum tests between treatments .........................................35 Table 2a: Kruskal-Wallis test across treatments of Chinese subjects ....................................36 Table 2b: Pairwise Wilcoxon rank-sum tests between treatments .........................................36 Table 3: Between samples Wilcoxon rank-sum tests .............................................................37 Table 4: Effect regression: Contribution on belief and type of treatments ............................39 Table 5: Chi-squared test on punishment effect and public information ...............................64-65 Table 6: Probit regression on public information effect and punishment effect ....................67-68 Table 7: Tabulation of choices ...............................................................................................89 Table 8a: Test of ingroup favoritism ......................................................................................90 Table 8b: Test of ingroup favoritism ......................................................................................91 Table 9: Comparison of effects ..............................................................................................92 4 Table 10: Estimates of preference contingent on partner’s group status ...............................94-95 List of figures: Figure 1: Overall result of Chinese subjects ..........................................................................33 Figure 2: Overall result of German subjects ..........................................................................34 Figure 3: Bribing behavior by percentage .............................................................................59 Figure 4: Accepting behavior by percentage .........................................................................61 Figure 5: Reporting behavior by percentage ..........................................................................62-63 List of Appendixes: Appendix 1: Instruction from the Invisible treatment (translated) ........................................106 Appendix 2: Instruction from the Name treatment (translated) .............................................107 Appendix 3: Instruction from the Visual treatment (translated) ............................................108 Appendix 4: Structure of the game ........................................................................................110 Appendix 5: Instruction and answer sheet of the Firm (translated) .......................................111 Appendix 6: Instruction and answer sheet of the Officer (translated) ...................................112 Appendix 7: Instruction and answer sheet of the Citizen (translated) ...................................113 Appendix 8: Formulate MLE .................................................................................................114 Appendix 9: Translation of the instruction of the third experiment.......................................115 5 All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permissions Coordinator,” at the address below. Dung Vu Forsthausweg 2 LE 735A 47057 Duisburg Germany 6 Preface: The question of which personal factor(s) interfere with people’s behavior in real life that results in the outcomes differing