Issues in Economic Systems and Institutions: Reputation
Main readings:
- Morris, S. (2001): “Political Correctness.” Journal of Political Economy, 109(2), 231 – 65.
- Scharfstein, D. and J. Stein (1990): “Herd Behavior and Investment.” American Economic Review, 80(3), 465 – 79.
- Knowles, J. and N. Persico (2001): “Racial Bias in Motor Vehicle Searches.” Journal of Political Economy, 109(1), 203 – 229.
- Persico, N. (2002): “Racial Profiling, Fairness and Effectiveness of Policing.” American Economic Review, 92(5), 1472 – 97.
- Coate, S. and G. Loury (1993): “Will Affirmative Action Eliminate Negative Stereotypes?” American Economic Review, 83, 1220 – 40.
Supplementary Readings:
This article discusses the Irish housing bubble. Reputational and informational herding may have played a role:
Credit rating agencies have received a lot of flak after the last financial crisis. Conflict of interest and incompetence are often blamed, but can herding be partly responsible?
- “Being Kept in the Dark on Wall Street.” New York Times, November 2, 2007.
- “Measuring the Measurers.” The Economist, May 31, 2007.
Here is Glenn Loury’s essay on political correctness which inspired Morris’ paper:
In these video clips, two British comedians and an American academic talk about political correctness, discussing both benefits and costs:
These papers use randomized control trials or natural experiments to detect discrimination:
- Bertrand, M. and S. Mullainathan (2004): “Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination.” American Economic Review, 94(4), 991 – 1013.
- Goldin, C. and C. Rouse (2000): “Orchestrating Impartiality: The Impact of Blind Auditions on Female Musicians.” American Economic Review, 90(4), 715 – 741.