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Statistical discrimination when group members are aware of their stereotype: Learning from David Hume and Adam Smith

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  • Levy, David M

Abstract

The founding contributions to the theory of statistical discrimination implicitly supposed group members unaware of how their choices influences their stereotype. Hume and Smith point out how small religious groups police their members' behavior evidencing awareness of stereotypical externalities. Did African-American legislators vote to impose a harsher penalty for using a drug favored by their constituents than what would be imposed on the chemically equivalent drug favored by others in awareness of stereotypical externalities? Newspaper discussions are full of concern for the cost of the stereotype on law abiding voters.

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  • Levy, David M, 2021. "Statistical discrimination when group members are aware of their stereotype: Learning from David Hume and Adam Smith," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 86-93.
    • Handle: RePEc:eee:jeborg:v:181:y:2021:i:c:p:86-93
    DOI: 10.1016/j.jebo.2020.11.023
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    References listed on IDEAS

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    1. Frank H. Knight, 1923. "The Ethics of Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 37(4), pages 579-624.
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    3. Anderson, Gary M, 1988. "Mr. Smith and the Preachers: The Economics of Religion in the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 1066-1088, October.
    4. David M. Levy, 2007. "The Puzzle of Jevons," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 15(3), pages 165-171.
    5. Levy,David M. & Peart,Sandra J., 2017. "Escape from Democracy," Cambridge Books, Cambridge University Press, number 9781316507131.
    6. Halpern, Joseph Y. & Rêgo, Leandro C., 2009. "Reasoning about knowledge of unawareness," Games and Economic Behavior, Elsevier, vol. 67(2), pages 503-525, November.
    7. Mizuta, Hiroshi, 2000. "Adam Smith's Library: A Catalogue," OUP Catalogue, Oxford University Press, number 9780198285908.
    8. David M. Levy & Sandra J. Peart, 2016. "Group Analytics in Adam Smith’s Work," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(4), pages 514-527, September.
    9. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
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    Cited by:

    1. Lundberg, Alexander & Mungan, Murat, 2022. "The effect of evidentiary rules on conviction rates," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 563-576.

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