Polarization, Social Identity, and Ingroup bias in belief formation

Abstract
A large literature in social psychology and experimental economics has documented a broad variety of behavioral reactions to group membership, most famously ingroup-bias in allocation decisions. In this study, we investigate whether this phenomenon also extends to the domain of belief formation. We show that individuals indeed display ingroup bias in the demand for as well as in the processing of information and illustrate how these mechanisms may contribute to political polarization in the context of the US 2020 presidential election. We also show that individual heterogeneity of ingroup bias in belief formation is systematically correlated with ingroup bias in allocation decisions, providing a first indication that the sensitivity to group settings might be a universal and domain-independent individual trait, which is measurable using behavioral experiments.