In 1906, sociologist William Sumner posited that humans are intrinsically more comfortable existing within social groups and that we are also inclined to believe our own group superior to any others. We tend to favour and place more merit on the opinions and actions of people from our own in-group. We build up our social identity and self-esteem through belonging and people who are from within our group remind us of this belonging and are automatically given preferential treatment.
Tajfel conducted an experiment by splitting a class of 14 year old boys in to arbitrary groups and then assigning them random tasks. These tasks started out quite inanely and eventually turned in to slightly more competitive ones where monetary value was assigned. Despite the fact that they all knew each other and potentially had alternative friendship groups outside of this experiment, Tajfel observed how quickly the boys not only formed strong alliances to their own assigned groups but also began to make choices that would be to the detriment of the other groups. For example, one of their last tasks was a hypothetical situation concerning the profit that could be made through selling art and the boys were given choices about which actions they could take. Some actions led to them making a profit, some led to all groups making a profit and the final actions would lead towards them making a profit whilst other groups suffered a loss. Overwhelmingly the boys chose the latter option, not only wanting their group to succeed but other groups to fail.
In the commercial world, this In-group Bias is obvious in extreme brand loyalty. Take Apple for example: people are proud of being part of the Apple ‘gang’ and feel like they have more in common with the other people who also use Apple products, producing at once an instant bond and loyalty towards them and also a disconnection from those who are “outside” this group because they use alternate brand technology. On a smaller scale, the In-group Bias is an effective way of gaining loyalty and trust for your product or service by building up membership schemes or showing customer testimonials on your site from other people who would be considered part of the same “in-group” using your brand.