The effects of information and competition on racial discrimination: Evidence from a field experiment

John Nunley (), Mark Owens and R. Stephen Howard

Journal of Economic Behavior & Organization, 2011, vol. 80, issue 3, 670-679

Abstract: We study racial discrimination by simultaneously selling identical products on eBay in pairs of auctions posted under different racially identifying names. We detect significant price differences, which are indicative of in-group biases. White names receive higher prices for distinctively white products, and black names receive higher prices for distinctively black products. But price differences only emerge for sellers who have low eBay feedback scores in less competitive markets. Because the price differences dissipate as sellers accumulate credible reputations, the patterns in the data are indicative of statistical discrimination. Overall, the results suggest that mechanisms designed to reduce informational asymmetries and increased competition are both effective at reducing discrimination in online auctions.

Keywords: Racial discrimination; Statistical discrimination; In-group bias; Asymmetric information; Field experiments; Competition; eBay (search for similar items in EconPapers)
JEL-codes: C93 D82 J15 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:80:y:2011:i:3:p:670-679

DOI: 10.1016/j.jebo.2011.06.028

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