The influence of group identity on farmer’s decision making: an experimental economics approach on a family farming case in Costa Rica

A successful family farming sector is strategic for developing rural areas, but is is endangered by household-specific market failures, high transaction costs and low bargaining power. Contract farming and collective actions are two common institutional devices for acquiring a level of certainty regarding market information, delivery conditions and procurement prices. Farmers’ associations is one of the common form of collective actions, but faces problems of opportunistic behaviour from their participating members. The intensity of group identity felt by an individual member is an essential determinant of the level of commitment and support granted towards the association. This case study analyzes the interdependence between individual identification intensity and revealed commitment for a commodity specific association that is based on individual membership. Members and non-members of the association participated in a questionnaire followed by a natural field experiment concerning their social identity towards the existing pepper association. By manipulating the social identity variable it could be seen that social identity has an influence on the participation of the individual in the association. This effect could be found for members and non-members alike. Strengthened social identity generally increased the participation of the individual in the organisation.