Paying It Forward and Getting It Back: The Benefits of Shared Social Identity in Generalized Exchange

Abstract

Generalized exchange is a powerful prosocial behavior with a number of individual and collective benefits, but indirect repayment makes it riskier than other forms of exchange, and this risk is reflected in comparatively lower rates of giving in generalized exchange systems. This study tests whether sharing a social identity motivates greater giving in generalized exchange. It also examines important, but often overlooked, differences between two forms of social identity: category-based social identity, which stems from similarities, and group-based social identity, which stems from interactive, interdependent relationships. As predicted, results of a controlled laboratory experiment demonstrate group-based social identity has a stronger impact than category-based social identity on giving in generalized exchange. The findings of this study have important implications for the study of social identity and, more generally, the study of categories and groups. The findings also shed light on ways groups, such as nonprofit and voluntary organizations, may motivate greater generosity in the prosocial process of generalized exchange.