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

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  • Nunley, John M.
  • Owens, Mark F.
  • Howard, R. Stephen

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 80 (2011)
Issue (Month): 3 ()
Pages: 670-679

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Handle: RePEc:eee:jeborg:v:80:y:2011:i:3:p:670-679

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Web page: http://www.elsevier.com/locate/jebo

Related research

Keywords: Racial discrimination; Statistical discrimination; In-group bias; Asymmetric information; Field experiments; Competition; eBay;

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References

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Cited by:
  1. von Essen, Emma & Karlsson, Jonas Karlsson, 2013. "A matter of transient anonymity: Discrimination by gender and foreignness in online auctions," Research Papers in Economics 2013:6, Stockholm University, Department of Economics.
  2. John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2014. "An Examination of Racial Discrimination in the Labor Market for Recent College Graduates: Estimates from the Field," Auburn Economics Working Paper Series auwp2014-06, Department of Economics, Auburn University.

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