Psychological mechanisms underlying ingroup favouritism in cooperation: Revisiting the reputation management and expectation hypotheses

According to the theory of bounded generalized reciprocity (BGR), intergroup contexts afford individuals the assumption that indirect reciprocity is bounded by group membership, and this shapes ingroup favouritism in cooperation. The assumption of bounded indirect reciprocity is hypothesized to result in ingroup favouritisms via two pathways: it leads people to behave in ways that earn and maintain a positive reputation in the eyes of ingroup, but not outgroup, members (the reputation management hypothesis), and it leads individuals to expect other ingroup members to be more cooperative than outgroup members (the expectation hypothesis). In other words, BGR offers two parallel psychological explanations for why people display ingroup favouritism. While the latter hypothesis has gained much experimental support, evidence for the former is rather scarce. Here, we report a direct test of both the reputation management hypothesis and the expectation hypothesis using two economic games. Overall, we found support for the expectation hypothesis, but not for the reputation management hypothesis.