Uncovering sophisticated discrimination with the help of credence goods markups - evidence from a natural field experiment

Jonathan Hall (), Rudolf Kerschbamer, Daniel Neururer () and Eric Skoog ()

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: We present the results of a pre-registered natural field experiment designed to uncover a sophisticated form of discrimination against an immigrant minority in a market for credence goods. For this purpose, we introduce two markups: (i) the credence goods markup defined as the difference between the price paid by the same person for an ordinary service and an otherwise equivalent credence goods service; and (ii) the discriminatory markup defined as the difference between the price paid by a member of an immigrant minority group and the price paid by a member of the majority group for the same kind of service. We document the existence of a large credence goods markup of about 40%, on average. Moreover, we find a sizeable discriminatory markup for the credence goods service but no discriminatory markup for the ordinary service. The results of an ex-post survey suggest that this sophisticated form of discrimination is mainly due to the prejudicial behavior of sellers belonging to an established local ethnic minority group towards buyers belonging to a low-status immigrant ethnic minority group.

Keywords: patience; time preferences; group decisions; payoff heterogeneity; experiment (search for similar items in EconPapers)
JEL-codes: C93 D82 J15 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019-11
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www2.uibk.ac.at/downloads/c4041030/wpaper/2019-11.pdf (application/pdf)

Related works:
Journal Article: Uncovering Sophisticated Discrimination with the Help of Credence Goods Markups: Evidence from a Natural Field Experiment (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2019-11

Access Statistics for this paper

More papers in Working Papers from Faculty of Economics and Statistics, Universität Innsbruck Contact information at EDIRC.
Bibliographic data for series maintained by Judith Courian ( this e-mail address is bad, please contact ).