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Cultural Diversity, Discrimination and Economic Outcomes: an experimental analysis

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Author Info
Paul J. Ferraro
Ronald G. Cummings
Abstract

Economists have paid increasing attention to the role of cultural diversity in explaining the variability of economic outcomes across societies. We develop an experimental framework that complements existing research in this area. We implement the framework with two cultures that coexist in an industrialized society: the Hispanic and Navajo cultures in the southwestern United States. We vary the ethnic mix of our experimental sessions in order to infer the effect of intercultural interactions on economic behavior and outcomes. We control for demographic differences in our subject pools and elicit beliefs directly in order to differentiate between statistical discrimination and preference-based discrimination. We present clear evidence that Hispanic and Navajo subjects behave differently and that their behavior is affected by the ethnic composition of the experimental session. Our experimental framework has the potential to shed much needed light on economic behavior and outcomes in societies of mixed ethnicity, race and religion.

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Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 0040.

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Length: 47 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:feb:artefa:0040

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Related research
Keywords: culture; diversity; discrimination; bargaining; economic experiments;

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Find related papers by 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

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