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Cultural Diversity, Discrimination, And Economic Outcomes: An Experimental Analysis

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  • PAUL J. FERRARO
  • RONALD G. CUMMINGS

Abstract

Does cultural diversity affect economic outcomes? We develop an experimental framework that complements ongoing research on this question. We vary the ethnic mix of bargaining sessions to study intercultural interactions among members of U.S. Hispanic and Navajo cultures. We control for demographic differences in our subject pools and elicit beliefs directly in order to differentiate between statistical discrimination and preference‐based discrimination. Hispanic and Navajo subjects behave differently, and their behavior is affected by the ethnic composition of the experimental session. Our experimental framework can shed light on economic behavior and outcomes in societies of mixed ethnicity, race, and religion. (JEL C78, C90, Z10)

Suggested Citation

  • Paul J. Ferraro & Ronald G. Cummings, 2007. "Cultural Diversity, Discrimination, And Economic Outcomes: An Experimental Analysis," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 217-232, April.
  • Handle: RePEc:bla:ecinqu:v:45:y:2007:i:2:p:217-232
    DOI: 10.1111/j.1465-7295.2006.00013.x
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    3. Güth, Werner & Kocher, Martin G., 2014. "More than thirty years of ultimatum bargaining experiments: Motives, variations, and a survey of the recent literature," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 396-409.
    4. Werner, Katharina & Graf Lambsdorff, Johann, 2016. "Emotional numbing and lessons learned after a violent conflict - Experimental evidence from Ambon, Indonesia," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-74-16, University of Passau, Faculty of Business and Economics.
    5. Bulat Mukhamediyev, 2007. "Monetary policy rules of the National Bank of Kazakhstan (in Russian)," Quantile, Quantile, issue 3, pages 91-106, September.
    6. Catherine C. Eckel & Ragan Petrie, 2011. "Face Value," American Economic Review, American Economic Association, vol. 101(4), pages 1497-1513, June.
    7. Tom Lane, 2015. "Discrimination in the laboratory: a meta-analysis," Discussion Papers 2015-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. Giacomo De Luca & Jeroen Schokkaert & Jo Swinnen, 2011. "Cultural Differences, Assimilation and Behavior: Player Nationality and Penalties in Football," LICOS Discussion Papers 29711, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    9. Bicskei, Marianna & Lankau, Matthias & Bizer, Kilian, 2016. "Negative reciprocity and its relation to anger-like emotions in identity-homogeneous and -heterogeneous groups," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 17-34.
    10. Faillo, Marco & Grieco, Daniela & Zarri, Luca, 2012. "Cultural Diversity, Cooperation,and Anti-social Punishment," AICCON Working Papers 102-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    11. van Damme, Eric & Binmore, Kenneth G. & Roth, Alvin E. & Samuelson, Larry & Winter, Eyal & Bolton, Gary E. & Ockenfels, Axel & Dufwenberg, Martin & Kirchsteiger, Georg & Gneezy, Uri & Kocher, Martin G, 2014. "How Werner Güth's ultimatum game shaped our understanding of social behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 292-318.
    12. Daniel J. Lee, 2016. "Racial bias and the validity of the Implicit Association Test," WIDER Working Paper Series 053, World Institute for Development Economic Research (UNU-WIDER).
    13. Griffin, John & Nickerson, David & Wozniak, Abigail, 2012. "Racial differences in inequality aversion: Evidence from real world respondents in the ultimatum game," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 600-617.
    14. Daniel J. Lee, 2016. "Racial bias and the validity of the Implicit Association Test," WIDER Working Paper Series wp-2016-53, World Institute for Development Economic Research (UNU-WIDER).
    15. Bouma, Jetske & Bulte, Erwin & van Soest, Daan, 2008. "Trust and cooperation: Social capital and community resource management," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 155-166, September.
    16. Tony Beatton & Uwe Dulleck & Jonas Fooken & Markus Schaffner, 2017. "Wages, Promises and Effort in an Intercultural Labour Market: Experimental Evidence from Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(3), pages 257-277, July.
    17. Chen, Kang & Tang, Fang-Fang, 2009. "Cultural differences between Tibetans and ethnic Han Chinese in ultimatum bargaining experiments," European Journal of Political Economy, Elsevier, vol. 25(1), pages 78-84, March.
    18. Gurven, Michael & Zanolini, Arianna & Schniter, Eric, 2008. "Culture sometimes matters: Intra-cultural variation in pro-social behavior among Tsimane Amerindians," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 587-607, September.
    19. Daniel Ji & Pablo Guillen, 2010. "Trust, discrimination and acculturation Experimental evidence on Asian international and Australian domestic university students," ThE Papers 09/12, Department of Economic Theory and Economic History of the University of Granada..
    20. Adrian Viliami Bell, 2013. "Evolutionary Thinking in Microeconomic Models: Prestige Bias and Market Bubbles," PLOS ONE, Public Library of Science, vol. 8(3), pages 1-5, March.

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    More about this item

    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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