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Skill uncertainty and social inference

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  • Oxoby, Robert J.

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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Bibliographic 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. Michael R. Pergamit & Jonathan R. Veum, 1999. "What is a promotion?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 581-601, July.
  2. Oxoby, Robert J., 2002. "Status characteristics, cognitive bias, and incentives in teams," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(3), pages 301-316.
  3. Harry Holzer & David Neumark, 1999. "Assessing Affirmative Action," NBER Working Papers 7323, National Bureau of Economic Research, Inc.
  4. Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. Susan Athey, 1998. "Mentoring and Diversity," Working papers 98-2, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Oxoby, Robert J., 2007. "Skill Uncertainty and Social Inference," IZA Discussion Papers 2567, Institute for the Study of Labor (IZA).
  7. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-47, June.
  8. Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 121-136, July.
  9. 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.
  10. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June.
  11. Manski, C.F., 1990. "Dynamic Choice In A Social Setting," Working papers 9003, Wisconsin Madison - Social Systems.
  12. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
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Cited by:
  1. Larry L. Howard & Nishith Prakash, 2011. "Do Employment Quotas Explain the Occupational Choices of Disadvantaged Minorities in India?," Working papers 2012-31, University of Connecticut, Department of Economics.
  2. Oxoby, Robert J., 2007. "Skill Uncertainty and Social Inference," IZA Discussion Papers 2567, Institute for the Study of Labor (IZA).

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