Working Paper: NBER ID: w9579
Authors: Roland G. Fryer Jr.; Matthew O. Jackson
Abstract: There is a wealth of research in psychology demonstrating that agents process information with the aid of categories. In this paper we study this phenomenon in two parts. First, we build a model of how experiences are sorted into categories and how categorization affects decision making. Second, we analyze the personal biases that result from categorization, in economic contexts. We show that discrimination can result from such cognitive processes even when there is no malevolent taste to do so and workers' qualifications are fully observable. The model also provides a framework that is equipped to investigate the social psychological concept of identity, where identity is viewed as self-categorization.
Keywords: No keywords provided
JEL Codes: D81; J15; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Categorization (D80) | Decision Making (D87) |
| Decision Making (D87) | Biases Against Minority Groups (J15) |
| Categorization (D80) | Biases Against Minority Groups (J15) |
| Coarser Categorization (D80) | Discrimination Against Minorities (J15) |
| Prototypes Based on Categories (Y90) | Predictions About Individuals' Capabilities (D29) |
| Categorization Process (D91) | Differential Treatment Based on Group Size and Visibility (C92) |