In-group favoritism in social dilemma situations is one of the mainfindings of studies in Social Identity Theory. We investigate what causes the in-group bias: is it due to mere group affiliation or, alternatively, is guilt-aversion a possible explanation? We induce group membership in a minimal group setting, observe in-/out-group transfers and elicit respective beliefs. We find that mere group affiliation affects beliefs and explains a substantial part of the bias, but we also find evidence in favor of guilt-aversion as a source of motivation.
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