IDEAS home Printed from https://ideas.repec.org/a/bla/ecinqu/v45y2007i2p217-232.html
   My bibliography  Save this article

Cultural Diversity, Discrimination, And Economic Outcomes: An Experimental Analysis

Author

Listed:
  • PAUL J. FERRARO
  • RONALD G. CUMMINGS

Abstract

Does cultural diversity affect economic outcomes? We develop an experimental framework that complements ongoing research on this question. We vary the ethnic mix of bargaining sessions to study intercultural interactions among members of U.S. Hispanic and Navajo cultures. We control for demographic differences in our subject pools and elicit beliefs directly in order to differentiate between statistical discrimination and preference‐based discrimination. Hispanic and Navajo subjects behave differently, and their behavior is affected by the ethnic composition of the experimental session. Our experimental framework can shed light on economic behavior and outcomes in societies of mixed ethnicity, race, and religion. (JEL C78, C90, Z10)

Suggested Citation

  • Paul J. Ferraro & Ronald G. Cummings, 2007. "Cultural Diversity, Discrimination, And Economic Outcomes: An Experimental Analysis," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 217-232, April.
    • Handle: RePEc:bla:ecinqu:v:45:y:2007:i:2:p:217-232
    DOI: 10.1111/j.1465-7295.2006.00013.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7295.2006.00013.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7295.2006.00013.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
    2. Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
    3. Joseph Henrich, 2001. "In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies," American Economic Review, American Economic Association, vol. 91(2), pages 73-78, May.
    4. David Neumark & Roy J. Bank & Kyle D. Van Nort, 1996. "Sex Discrimination in Restaurant Hiring: An Audit Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(3), pages 915-941.
    5. Roth, Alvin E. & Vesna Prasnikar & Masahiro Okuno-Fujiwara & Shmuel Zamir, 1991. "Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh, and Tokyo: An Experimental Study," American Economic Review, American Economic Association, vol. 81(5), pages 1068-1095, December.
    6. Oxoby, Robert J. & McLeish, Kendra N., 2004. "Sequential decision and strategy vector methods in ultimatum bargaining: evidence on the strength of other-regarding behavior," Economics Letters, Elsevier, vol. 84(3), pages 399-405, September.
    7. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 49-89.
    8. Miguel, Ted, 1999. "Ethnic diversity, mobility and school funding: theory and evidence from Kenya," LSE Research Online Documents on Economics 6675, London School of Economics and Political Science, LSE Library.
    9. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 285-300, October.
    10. Goldberg, Pinelopi Koujianou, 1996. "Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 622-654, June.
    11. Eckel, Catherine C & Grossman, Philip J, 2001. "Chivalry and Solidarity in Ultimatum Games," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 171-188, April.
    12. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1203-1250.
    13. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    14. John Yinger, 1998. "Evidence on Discrimination in Consumer Markets," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 23-40, Spring.
    15. Jeffrey P. Carpenter & Glenn W. Harrison & John A. List, 2005. "Field Experiments In Economics: An Introduction," Research in Experimental Economics, in: Field Experiments in Economics, pages 1-15, Emerald Group Publishing Limited.
    16. Helen F. Ladd, 1998. "Evidence on Discrimination in Mortgage Lending," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 41-62, Spring.
    17. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, vol. 112(483), pages 480-518, November.
    18. Chaim Fershtman & Uri Gneezy & Frank Verboven, 2005. "Discrimination and Nepotism: The Efficiency of the Anonymity Rule," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 371-396, June.
    19. Stanley, T. D. & Tran, Ume, 1998. "Economics students need not be greedy: Fairness and the ultimatum game," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(6), pages 657-663.
    20. John R. Carter & Michael D. Irons, 1991. "Are Economists Different, and If So, Why?," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 171-177, Spring.
    21. Joseph Henrich, 2000. "Does Culture Matter in Economic Behavior? Ultimatum Game Bargaining among the Machiguenga of the Peruvian Amazon," American Economic Review, American Economic Association, vol. 90(4), pages 973-979, September.
    22. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    23. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    24. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    25. Solnick, Sara J, 2001. "Gender Differences in the Ultimatum Game," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 189-200, April.
    26. Nancy Buchan & Rachel Croson, 1999. "Gender and Culture: International Experimental Evidence from Trust Games," American Economic Review, American Economic Association, vol. 89(2), pages 386-391, May.
    27. Ockenfels, Axel & Weimann, Joachim, 1999. "Types and patterns: an experimental East-West-German comparison of cooperation and solidarity," Journal of Public Economics, Elsevier, vol. 71(2), pages 275-287, February.
    28. Joseph Henrich, 2000. "Does culture matter in economic behavior? Ultimatum game bargaining among the machiguenga," Artefactual Field Experiments 00067, The Field Experiments Website.
    29. James Andreoni & Marco Castillo & Ragan Petrie, 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game," American Economic Review, American Economic Association, vol. 93(3), pages 672-685, June.
    30. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel J. Lee, 2018. "Does Implicit Bias Predict Dictator Giving?," Games, MDPI, vol. 9(4), pages 1-19, September.
    2. Guillen, Pablo & Ji, Daniel, 2011. "Trust, discrimination and acculturation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 594-608.
    3. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    4. Werner, Katharina & Graf Lambsdorff, Johann, 2016. "Emotional numbing and lessons learned after a violent conflict - Experimental evidence from Ambon, Indonesia," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-74-16, University of Passau, Faculty of Business and Economics.
    5. Bulat Mukhamediyev, 2007. "Monetary policy rules of the National Bank of Kazakhstan (in Russian)," Quantile, Quantile, issue 3, pages 91-106, September.
    6. Bao, Te & Liang, Bin & Pei, Jiaoying, 2022. "Does ethnic diversity always undermine pro-social behavior? Evidence from a laboratory experiment," European Journal of Political Economy, Elsevier, vol. 72(C).
    7. Catherine C. Eckel & Ragan Petrie, 2011. "Face Value," American Economic Review, American Economic Association, vol. 101(4), pages 1497-1513, June.
    8. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    9. Astrid Dannenberg & Bodo Sturm & Carsten Vogt, 2010. "Do Equity Preferences Matter for Climate Negotiators? An Experimental Investigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(1), pages 91-109, September.
    10. Giacomo De Luca & Jeroen Schokkaert & Jo Swinnen, 2011. "Cultural Differences, Assimilation and Behavior: Player Nationality and Penalties in Football," LICOS Discussion Papers 29711, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    11. Jin, Yi & Gao, Xin & Li, Donghui, 2022. "The effect of individualism on bank risk and bank Performance: An international study," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    12. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2016. "Negative reciprocity and its relation to anger-like emotions in identity-homogeneous and -heterogeneous groups," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 17-34.
    13. Faillo, Marco & Grieco, Daniela & Zarri, Luca, 2012. "Cultural Diversity, Cooperation,and Anti-social Punishment," AICCON Working Papers 102-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    14. van Damme, Eric & Binmore, Kenneth G. & Roth, Alvin E. & Samuelson, Larry & Winter, Eyal & Bolton, Gary E. & Ockenfels, Axel & Dufwenberg, Martin & Kirchsteiger, Georg & Gneezy, Uri & Kocher, Martin G, 2014. "How Werner Güth's ultimatum game shaped our understanding of social behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 292-318.
    15. Daniel J. Lee, 2016. "Racial bias and the validity of the Implicit Association Test," WIDER Working Paper Series 053, World Institute for Development Economic Research (UNU-WIDER).
    16. Griffin, John & Nickerson, David & Wozniak, Abigail, 2012. "Racial differences in inequality aversion: Evidence from real world respondents in the ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 600-617.
    17. Daniel J. Lee, 2016. "Racial bias and the validity of the Implicit Association Test," WIDER Working Paper Series wp-2016-53, World Institute for Development Economic Research (UNU-WIDER).
    18. Giacomo De Luca & Jeroen Schokkaert & Johan Swinnen, 2015. "Cultural Differences, Assimilation, and Behavior," Journal of Sports Economics, , vol. 16(5), pages 508-530, June.
    19. Bouma, Jetske & Bulte, Erwin & van Soest, Daan, 2008. "Trust and cooperation: Social capital and community resource management," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 155-166, September.
    20. Tony Beatton & Uwe Dulleck & Jonas Fooken & Markus Schaffner, 2017. "Wages, Promises and Effort in an Intercultural Labour Market: Experimental Evidence from Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(3), pages 257-277, July.
    21. Chen, Kang & Tang, Fang-Fang, 2009. "Cultural differences between Tibetans and ethnic Han Chinese in ultimatum bargaining experiments," European Journal of Political Economy, Elsevier, vol. 25(1), pages 78-84, March.
    22. Gurven, Michael & Zanolini, Arianna & Schniter, Eric, 2008. "Culture sometimes matters: Intra-cultural variation in pro-social behavior among Tsimane Amerindians," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 587-607, September.
    23. Daniel Ji & Pablo Guillen, 2010. "Trust, discrimination and acculturation Experimental evidence on Asian international and Australian domestic university students," ThE Papers 09/12, Department of Economic Theory and Economic History of the University of Granada..
    24. Florian Artinger & Filippos Exadaktylos & Hannes Koppel & Lauri Sääksvuori, 2010. "Applying Quadratic Scoring Rule transparently in multiple choice settings: A note," ThE Papers 10/01, Department of Economic Theory and Economic History of the University of Granada..
    25. Adrian Viliami Bell, 2013. "Evolutionary Thinking in Microeconomic Models: Prestige Bias and Market Bubbles," PLOS ONE, Public Library of Science, vol. 8(3), pages 1-5, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ronald Cummings & Paul Ferraro, 2005. "Cultural diversity, discrimination and economic outcomes: An experimental analysis," Artefactual Field Experiments 00045, The Field Experiments Website.
    2. List John A., 2007. "Field Experiments: A Bridge between Lab and Naturally Occurring Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(2), pages 1-47, April.
    3. Griffin, John & Nickerson, David & Wozniak, Abigail, 2012. "Racial differences in inequality aversion: Evidence from real world respondents in the ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 600-617.
    4. Chen, Daniel L. & Schonger, Martin, 2016. "A Theory of Experiments: Invariance of Equilibrium to the Strategy Method of Elicitation and Implications for Social Preferences," TSE Working Papers 16-724, Toulouse School of Economics (TSE), revised Feb 2020.
    5. Morten Størling Hedegaard & Jean-Robert Tyran, 2018. "The Price of Prejudice," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 40-63, January.
    6. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    7. Azmat, Ghazala & Petrongolo, Barbara, 2014. "Gender and the labor market: What have we learned from field and lab experiments?," Labour Economics, Elsevier, vol. 30(C), pages 32-40.
    8. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 49-89.
    9. Chuah, Swee-Hoon & Hoffmann, Robert & Jones, Martin & Williams, Geoffrey, 2009. "An economic anatomy of culture: Attitudes and behaviour in inter- and intra-national ultimatum game experiments," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 732-744, October.
    10. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December.
    11. Faillo, Marco & Grieco, Daniela & Zarri, Luca, 2012. "Cultural Diversity, Cooperation,and Anti-social Punishment," AICCON Working Papers 102-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    12. John J. Donohue III, 2005. "The Law and Economics of Antidiscrimination Law," NBER Working Papers 11631, National Bureau of Economic Research, Inc.
    13. Castillo, Marco & Petrie, Ragan & Torero, Maximo & Vesterlund, Lise, 2013. "Gender differences in bargaining outcomes: A field experiment on discrimination," Journal of Public Economics, Elsevier, vol. 99(C), pages 35-48.
    14. Marianne Bertrand & Esther Duflo, 2016. "Field Experiments on Discrimination," NBER Working Papers 22014, National Bureau of Economic Research, Inc.
    15. Carlsson, Magnus & Fumarco, Luca & Rooth, Dan-Olof, 2013. "Artifactual Evidence of Discrimination in Correspondence Studies? A Replication of the Neumark Method," IZA Discussion Papers 7619, Institute of Labor Economics (IZA).
    16. Nicolas Eber & Marc Willinger, 2004. "Are Athletes Different ? An Experimental Study Based on the Ultimatum Game," Working Papers of LaRGE Research Center 2004-01, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    17. Batsaikhan, Mongoljin & He, Tai-Sen & Li, Yupeng, 2021. "Accents, group identity, and trust behaviors: Evidence from Singapore," China Economic Review, Elsevier, vol. 70(C).
    18. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
    19. Katherine B. Coffman & Christine L. Exley & Muriel Niederle, 2021. "The Role of Beliefs in Driving Gender Discrimination," Management Science, INFORMS, vol. 67(6), pages 3551-3569, June.
    20. Slonim, Robert & Guillen, Pablo, 2010. "Gender selection discrimination: Evidence from a Trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 385-405, November.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecinqu:v:45:y:2007:i:2:p:217-232. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.