Quick review of main points:

Rothbart, Davis-Stitt, & Hill (1997):

Arbitrary category boundaries and labels both affect observers' judgments about the perceived similarity of targets.

When people were within the same labeled category, they were seen as more similar than when they were in different categories, even with the underlying "amount" of difference between them was the same.

The presence of visual boundaries (heavy lines marking off different sections of the scale) also affected perceived similarity.

Results show the effects of BOTH within-category assimilation and between-category accentuation (contrast effect).

No evidence of outgroup homogeneity was found.

Insko et al., 1994

In two mixed motive experiments comparing the behavior of individuals and groups, Insko et al. demonstrate that groups are more competitive than individuals, and that this is true whether comparing two groups with two individuals, or comparing three groups with three individuals.

The discontinuity effect was relatively constant across six trials (Experiment 1).

Evidence of greater fear/mistrust and greed by groups as compared to individuals suggests the underlying causes of the discontinuity effect. Groups were just as likely to make cooperative agreements with one another as were individuals, but they were less likely to honor these agreements.