Supply and Demand for Discrimination: An Experiment Using Photos

 

By: Anthony Heyes ; John List
URL: http://d.repec.org/n?u=RePEc:feb:artefa:00448&r=ltv

There is a large and diverse body of evidence that people condition their behavior on the characteristics of others. If type is visible then one agent seeing another with whom they are interacting, or observing some other close proxy for type, can affect outcomes. Goldin and Rouse (2000) showed that the adoption of “blind” auditions—with a screen concealing each candidate’s identity from the jury—increased significantly the likelihood of a female being hired at five major American orchestras. Oreopoulos (2011) found that CVs sent in response to online job postings in Toronto were much more likely to elicit a response if they carried an English rather than Indian, Pakistani, Chinese, or Greek name. In recent work on behavior in the “sharing economy,” Pope and Sydnor (2011) showed that loan listings on the Prosper.com  peer-to-peer lending site were 25 to 35 percent less likely to receive funding if the borrower profile contained a black profile, while in their field experiment Edelman, Luca, and Svirsky (2015) found that room requests on Airbnb from guests with distinctively African American names were 16 percent less likely to be accepted than those from other requestors. When the characteristic in question is a  legally-protected one, as in these examples, we call prejudicial behavior toward a particular  subgroup discrimination. But the conditioning
of behavior on characteristics of others is more ubiquitous than our focus on race and gender would suggest. For example, Hamermesh and Biddle (1994) show that labor market outcomes for both men and women are increasing in how  good-looking they are rated as being in photographs (this behavior extends to even the charitable giving market; see Landry et al. 2006). There is a broader literature on how people make inferences from faces. For example, Oosterhof and Todorov (2009) find that perceptions of the trustworthiness of an individual in a photo can vary systematically with facial expressions and characteristics. DeBruine (2002) found evidence that facial resemblance enhanced trust. Van Leeuwen et al. (2014) find facial cues that predict propensity to anger. In Scharlemann et al. (2001) experimental subjects are more likely to regard as  cooperative a partner smiling in a photograph rather than of neutral expression. The desire to discriminate may provide a rationale for wanting to know about the identity of someone with whom you are interacting. Much more generally, however, in strategic settings we tend to think that there are certain advantages to knowing the features of the other agent. We might be able to learn something from their appearance that allows us to turn negotiations and other interactions in our favor. Consistent with this line of thought, a clever study due to Eckel and Petrie (2011) demonstrates that players in a trust game often have a positive willingness to pay (WTP) to see a picture of their partner. That is, there is a perceived private value to the information that such a  picture contains. Our research question is in this spirit, but different in that we explore whether individuals perceive a benefit to revealing a picture of themselves to partners in a strategic interaction (a trust game). If they do, then it implies that players believe that they can use their own characteristics to shape the actions of others.
Our pilot results reported in this study should be viewed with care, as they are preliminary and based on small samples. Yet, we find a substantial (and significant) portion of players have a positive WTP for revelation of own characteristics. Indeed, the strategic revelation follows economic theory well—there is an associated demand curve that is downward sloping.

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