Race effects on eBay

• Author: Ian Ayres,Mahzarin Banaji,Christine Jolls
• Date: 01 October 2015
• Published date: 01 October 2015
• DOI: http://doi.org/10.1111/1756-2171.12115

RAND Journal of Economics

Vol.46, No. 4, Winter 2015

pp. 891–917

Race effects on eBay

Ian Ayres∗

Mahzarin Banaji∗∗

and

Christine Jolls∗

Weinvestigate the impact of seller race in a field experiment involving baseball card auctions on

eBay. Photographs showed the cards held by either a dark-skinned/African-American hand or a

light-skinned/Caucasian hand. Cards held by African-American sellers sold for approximately

20% ($0.90) less than cards held by Caucasian sellers. Our evidence of race differentials is

important because the online environment is well controlled (with the absence of confounding

tester effects) and because the results show that race effects can persist in a thick real-world

market such as eBay.

1. Introduction

The large economics literature on eBay and other Internet auctions has given significant

emphasis to field experiments (e.g., Jin and Kato, 2006; Reiley, 2006; Resnick, Zeckhauser,

Swanson, and Lockwood,2006), and field experiments have likewise been prominent in contem-

porary studies of race discrimination (e.g., Bertrand and Mullainathan, 2004; List, 2004). The

present study arises at the intersection of these two literatures. We conduct a field experiment

on the effects of seller race on eBay, a leading Internet auction site. In our experiment, either a

dark-skinned/African-American hand or a light-skinned/Caucasian hand holds a baseball card up

for auction (see Figures 1–4). Our experiment is well suited to studying and isolating race effects

because online bidders have no access to the types of seller information—such as demeanor and

socioeconomic background—that are usually observable in field experiments examining the ef-

fects of race on economic behavior. Our study design also benefits greatly from the largeexisting

literature on Internet auctions (e.g., Melnik and Alm, 2002; Bajari and Hortacsu, 2003; Bolton,

∗YaleUniversity and NBER; ian.ayres@yale.edu, christine.jolls@yale.edu.

∗∗Har vardUniversity; mahzarin_banaji@harvard.edu.

Wethank Adam Cohen, Joshua Fischman, Naci Mocan, Barry Nalebuff, Nicola Persico, Jeremy Tobacman,and workshop

participants at Cornell University, Duke University, Georgia State University, Harvard Business School, the Wharton

School at the University of Pennsylvania, Yale University, the NBER Summer Institute, and the American Law and

Economics Association Annual Meeting for extremely helpful comments; Isra Bhatty, Daniel Klaff, Dina Mishra, Eli

Schachar, and Heidee Stoller for superb research assistance; and Ian Masias and James Richardson for excellent data set

assistance.

C2015, The RAND Corporation. 891

892 / THE RAND JOURNAL OF ECONOMICS

FIGURE 1

A screenshot showing a card held by a dark-skinned/African-American hand.

Katok, and Ockenfels, 2004; Jin and Kato, 2006; Reiley, 2006; Lucking-Reiley, Bryan, Prasad,

and Reeves, 2007; Cabral and Hortacsu, 2010).

In the typical setting (e.g., Ayres and Siegelman, 1995), it is hard to rule out entirely the

possibility that behavior or demeanor that might be correlated with race is the true cause of

any observed differential treatment of members of different races. Even in a tester study in

which racialized names rather than live individuals are used—as in the renowned resume study

of Bertrand and Mullainathan (2004)—it has proven to be difficult to disentangle race from

other factors. Although Bertrand and Mullainathan, as well as Nunley, Owens, and Howard

(2011), use an individual’s first name to signal race (e.g., “Emily” versus “Lakisha”), a potential

confounding factor, as Bertrand and Mullainathan discuss at some length, is that “common”

C

The RAND Corporation 2015.