Barking up the wrong tree

We conduct a field experiment to determine whether racial discrimination can be identified in product-market auctions and, if so, under what conditions it is more likely to emerge. We compare the prices paid for perfectly substitutable products sold on eBay between sellers with distinctively white and distinctively black names. Price differences arise in favor of sellers whose names match the expected racial characteristics of buyers. However, the price differences only emerge in markets characterized by low levels of competition, and eBay's feedback system, which reduces asymmetric information between buyer and seller, is successful at mitigating these differences. The results suggest, rather strongly, that competitive forces and market mechanisms designed to reduce informational asymmetries both can aid in promoting non-discriminatory outcomes in markets.

Source: "The Effects of Competition and Information on Racial Discrimination: Evidence from a Field Experiment" from Middle Tennessee State University, Department of Economics and Finance Working Papers # 201007

When there's money on the line, and the situation is pretty clear, I think racism tends to be much less of a factor. It sure doesn't affect millionaires' ability to pass to the right teammate on the court.

Here is a great book on the less ethical side of deals.

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