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Face Value

Author

Listed:
  • Catherine C. Eckel
  • Ragan Petrie

Abstract

People pay attention to the appearance of others, and personal characteristics can affect many types of decisions. We ask, is there informational value in a face in a situation where trust and reciprocity can increase earnings? We use a laboratory trust game experiment where subjects are unable to observe a counterpart, must observe a counterpart, or can pay to reveal a counterpart's photograph. Both senders and responders are willing to pay to observe the photos, and we show that behavior, earnings, and efficiency are affected. When subjects are "face to face," efficiency is enhanced, and senders have higher earnings. (JEL D12, D83, Z13)

Suggested Citation

  • Catherine C. Eckel & Ragan Petrie, 2011. "Face Value," American Economic Review, American Economic Association, vol. 101(4), pages 1497-1513, June.
    • Handle: RePEc:aea:aecrev:v:101:y:2011:i:4:p:1497-1513
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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