Symbols and Hold-up

Social psychology research shows that symbols play an important role in reinforcing group identity and enhancing cooperation among ingroup members by differentiating them from outgroup members. Symbols provide a clear way of identifying group boundaries and thus allow for achieving the benefits of cooperation without the risk of excessive costs by limiting altruistic behavior towards ingroup members. Social psychologists describe ingroup as a bounded community of mutual and depersonalized expectations of cooperation. Such expectations motivate adherence to ingroup norms and promote behavior that ensures that one is recognized as an ingroup member. This causes the use of symbols in the field being often confounded with communication, social interaction and possibly other contributing factors, making it hard to clearly identify their contribution to creating identity and subsequent effect on strategic decision-making, thus opening the door for their experimental separation. In this paper we present an experiment that separates the roles of symbols from helping behavior in creating group identity which is sufficiently strong to mitigate the hold-up problem.