Group Identity and Belief Formation: A Microfoundation of Political Polarization

Abstract

To evaluate the impact of group identity on belief formation, we conducted online experiments before and after the 2020 US presidential election. We elicit participants’ beliefs about future unemployment statistics and health system rankings and provide relevant news summaries. We find that people pay money to avoid information from political outgroups and attribute lower weight to this information when updating beliefs. An intervention which unlabels information sources decreases outgroup information avoidance by 50%, with a significant impact on only groupish participants. A debiasing intervention equalizing instrumental values of information sources reduces only universalists’ WTP for a private signal. The interventions have little effect on information processing. The evidence is consistent with a source-utility channel contributing to polarization.