In-group Bias

Ingroup bias is simply the tendency to favor one's own group. In-group bias is influenced by a neurotransmitter called oxytocin also known as "love molecule. It helps us to create strong bonds and relationships with people in our in-group and also makes us fearful, suspicious and disdainful to others groups known as the out-groups. 

The in-group bias causes us to overestimate the abilities and value of our immediate group. 

A study that supports this : British schoolboys were randomly placed into two groups. The boys were led to believe that the groups were defined on the basis of a preference for paintings by Klee or Kandinsky. The boys had to work individually (while knowing they belonged to either a Klee or Kandinsky group) and had to award points to both in-group and out-group members. They were not allowed to give points to themselves.

Results: The boys showed a strong tendency to award more points to members of their in-group over members of the out-group. Sometimes the boys would sacrifice gain for their in-group in order to maximize the difference between their in-group and out-group. For example, the boys would often give an in-group member 7 points and an out-group member 1, rather than giving them both 13 points as they could have done.