*The Why Axis*

That is the new, excellent, and self-recommending book by Uri Gneezy and John List.  The subtitle is Hidden Motives and the Undiscovered Economics of Everyday Life, and the core of the book revolves around the authors’ use of field and natural experiments to tease out what is causal and what is not.  List is in my view a candidate for a future Nobel Prize.

Here is one excerpt from the book, concerning the experience of trying to buy a car at auto dealerships:

In this experiment, we worked with our colleague Michael Price in assigning pairs of men to pose as our secret agents: straight men acting as friends, straight men playing loving partners, gay men acting as friends, and gay men portraying partners.  Each of these pairs visited various car dealerships to negotiate the purchase of a new car.  Every “couple” bargained at different randomly determined dealerships, and every dealership was approached twice.  We observed not only what kinds of offers the various “couples” received, but also how often they were offered niceties like a test drive and a cup of coffee.

Our results showed that the people acting as gay partners got shabbier treatment.  Many dealerships rejected offers from buyers they perceived as gay, while accepting identical offers from our straight buyers.  More than 75 percent of the time, dealers quoted the gay couples higher initial prices, when the gay couples extended counter offers, they were much more likely to be rejected and the salespeople ended the negotiations.

You can pre-order the book here.


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