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Social Inference and Occupational Choice: Type-Based Biases in a Bayesian Model of Class Formation

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  • Robert Oxoby

    (University of Calgary)

Abstract

Beliefs are a key motivator of individual behavior. As such, an understanding of how individuals' beliefs develop is a prerequisite to understanding decision-making and behavior. While rational choice theory posits a Bayesian model framework for belief formation, sta- tus construction theories argue that beliefs are strongly in uenced by status typi cations. In this paper, we develop a Bayesian model of belief formation in which individuals use irrelevant information on others' observable type to bias their beliefs. This model is used to analyze a simple occupational choice setting, thereby shedding light on the micro-macro inter-relationship between observable type (e.g. race, gender) and social class.

Suggested Citation

  • Robert Oxoby, "undated". "Social Inference and Occupational Choice: Type-Based Biases in a Bayesian Model of Class Formation," Working Papers 2009-07, Department of Economics, University of Calgary, revised 11 Jan 2009.
  • Handle: RePEc:clg:wpaper:2009-07
    as

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    File URL: https://econ.ucalgary.ca/sites/econ.ucalgary.ca.manageprofile/files/unitis/publications/162-34168/Oxoby.pdf
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    References listed on IDEAS

    as
    1. Christopher Avery & Susan Athey & Peter Zemsky, 2000. "Mentoring and Diversity," American Economic Review, American Economic Association, vol. 90(4), pages 765-786, September.
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    3. Kalai, Ehud & Lehrer, Ehud, 1993. "Rational Learning Leads to Nash Equilibrium," Econometrica, Econometric Society, vol. 61(5), pages 1019-1045, September.
    4. Basu, Kaushik, 1989. "A Theory of Association: Social Status, Prices and Markets," Oxford Economic Papers, Oxford University Press, vol. 41(4), pages 653-671, October.
    5. Jordan, J. S., 1991. "Bayesian learning in normal form games," Games and Economic Behavior, Elsevier, vol. 3(1), pages 60-81, February.
    6. Cox, James C. & Shachat, Jason & Walker, Mark, 2001. "An Experiment to Evaluate Bayesian Learning of Nash Equilibrium Play," Games and Economic Behavior, Elsevier, vol. 34(1), pages 11-33, January.
    7. Chinhui Juhn & Kevin M. Murphy & Robert H. Topel, 1991. "Why Has the Natural Rate of Unemployment Increased over Time?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 75-142.
    8. Fershtman, Chaim & Weiss, Yoram, 1993. "Social Status, Culture and Economic Performance," Economic Journal, Royal Economic Society, vol. 103(419), pages 946-959, July.
    9. 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 340-347, June.
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    13. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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