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Good-Looking Prices

Author

Listed:
  • Bradley J. Ruffle

    (Department of Economics, McMaster University, Canada; Rimini Centre for Economic Analysis)

  • Arie Sherman

    (Department of Economics and Management, Ruppin Academic Center, Israel)

  • Zeev Shtudiner

    (Department of Economics and Business Administration, Ariel University, Israel)

Abstract
We design a field experiment to test for price discrimination at seemingly highly competitive Israeli produce markets. We trained 90 buyers and sent them to produce markets across Israel. After verifying a product’s posted price, they asked for a discount on a one-kilogram or one-unit purchase. Vendors employ third-degree price discrimination: women are offered larger and more frequent discounts than men, and the more attractive the female buyer, the larger and more frequent the discount offered. Male buyers do not benefit from this beauty discount. No other buyer characteristic is a significant predictor of the likelihood or size of a discount. To understand our findings, we provide a more nuanced view of these markets that includes search costs and considerable vendor price-setting discretion.

Suggested Citation

  • Bradley J. Ruffle & Arie Sherman & Zeev Shtudiner, 2020. "Good-Looking Prices," Working Paper series 20-17, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:20-17
    as

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    References listed on IDEAS

    as
    1. Chaim Fershtman & Uri Gneezy, 2001. "Discrimination in a Segmented Society: An Experimental Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 351-377.
    2. Castillo, Marco & Petrie, Ragan & Torero, Maximo & Vesterlund, Lise, 2013. "Gender differences in bargaining outcomes: A field experiment on discrimination," Journal of Public Economics, Elsevier, vol. 99(C), pages 35-48.
    3. Brit Grosskopf & Graeme Pearce, 2020. "Do You Mind Me Paying Less? Measuring Other-Regarding Preferences in the Market for Taxis," Management Science, INFORMS, vol. 66(11), pages 5059-5074, November.
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    8. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-321, June.
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    10. Bradley J. Ruffle & Ze'ev Shtudiner, 2015. "Are Good-Looking People More Employable?," Management Science, INFORMS, vol. 61(8), pages 1760-1776, August.
    11. Miki Malul & Mosi Rosenboim & Tal Shavit, 2010. "Costs of Mistrust between Ethnic Majority and Minorities: Evidence from Israel," Review of Social Economy, Taylor & Francis Journals, vol. 68(4), pages 447-464.
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    Citations

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    Cited by:

    1. Zeev Shtudiner, 2020. "The impact of attractiveness on employability: Gender differences in peer effects," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1613-1620, December.
    2. Du, Ninghua & Song, Fei & Cadsby, C. Bram, 2022. "You cannot judge a book by its cover: Evidence from a laboratory experiment on recognizing generosity from facial information," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 100(C).
    3. Shtudiner, Zeev & Klein, Galit, 2020. "Gender, attractiveness, and judgment of impropriety: The case of accountants," European Journal of Political Economy, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    experimental economics; beauty; price discrimination; negotiation; price discounts; search costs;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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