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Skill uncertainty and social inference

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Author Info
Oxoby, Robert J.

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Abstract

Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who fail to observe successful predecessors of their same type may underestimate their potential for success in the occupation. We discuss the role of these biases in light of the literature on affirmative action and firm incentives.

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File URL: http://www.sciencedirect.com/science/article/B6VFD-4P06CBF-4/1/6e7225f8959da97babaf20b590660412
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Publisher Info
Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 3 (June)
Pages: 400-405
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Handle: RePEc:eee:labeco:v:15:y:2008:i:3:p:400-405

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  1. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December. [Downloadable!] (restricted)
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  2. repec:att:wimass:19903 is not listed on IDEAS
  3. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March. [Downloadable!] (restricted)
  4. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September. [Downloadable!] (restricted)
  5. Richard Startz & Lundberg, . "Private Discrimination and Social Intervention in Competitive Labor Markets," Rodney L. White Center for Financial Research Working Papers 19-81, Wharton School Rodney L. White Center for Financial Research.
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  6. Harry Holzer & David Neumark, 2000. "Assessing Affirmative Action," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 483-568, September. [Downloadable!] (restricted)
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  7. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June. [Downloadable!] (restricted)
  8. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  9. Susan Athey & Christopher Avery & Peter Zemsky, 2000. "Mentoring and Diversity," American Economic Review, American Economic Association, vol. 90(4), pages 765-786, September. [Downloadable!] (restricted)
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